Everything You Need to Know about Changes to How Homes are Bought and Sold

You may have heard about a settlement reached with the National Association of Realtors® (NAR) that affects the way people buy and sell homes in the United States. These policy changes, which are required by the settlement, took effect Saturday, August 17, 2024. Watch Locations Chief Sales Officer Chad Takesue and Principal Broker Michelle Mossman explain how these changes will affect homebuyers and sellers going forward—here in Hawaii and across the country, or keep reading to find out what's changed and what hasn't.

Watch Our Video Explaining Changes for Buyers and Sellers

Why Are the Rules Changing?

On March 15, 2024, NAR reached an agreement with plaintiffs to end litigation of claims brought on behalf of a group of home sellers related to broker commissions. The settlement includes some changes to the way real estate transactions take place. These changes are designed to provide greater transparency and empower homebuyers and sellers in the real estate market. The good news is that consumers will continue to have options when it comes to buying or selling a home.

How Will the Homebuying and Selling Process Change?

Real estate agents who use and list homes for sale on a Multiple Listing Service (MLS)—a local marketplace used by real estate professionals to share information about housing inventory—will be required to have written agreements in place with buyers before touring a home. There are also changes to how and where real estate agents may communicate with each other about offers of compensation. These offers will no longer be allowed on MLS platforms, but sellers can still offer compensation in other ways that don't involve an MLS. Sellers can still offer buyer concessions on an MLS (for example, offering to pay the buyer's closing costs).

Jump to information for homebuyers or sellers.

Information for Homebuyers

Buying a home is one of the biggest financial decisions most people will ever make. Partnering with a knowledgable real estate agent helps to ensure that you'll have the information and guidance necessary to make the choices that work best for you. This settlement has led to several changes that will benefit homebuyers, including a written buyer's agreement, which clearly outlines the benefits of working with an agent.

What’s Changed

• You'll now need to sign a written agreement with your agent before touring a home. Before you sign this agreement, be sure it reflects the terms you've negotiated with your agent and that you understand the services and value that your agent will provide.
• Written agreements apply to in-person and live virtual home tours. You won't need a written agreement to just speak to an agent at an open house or ask them about their services.
• The seller may agree to pay your agent for their services. This practice is allowed, but the offer cannot be shared on the MLS.

What Stays the Same

• Your agent’s compensation remains fully negotiable.
• You can still accept concessions from the seller, such as offers to pay your closing costs.
• Your Locations agent will help you to navigate the homebuying process and work in your best interest.
• Your Locations agent will follow the Realtor® Code of Ethics and have clear, transparent conversations with you about payment.
• You have choices! Work with your Locations agent to understand the full range of these choices when buying a home, so you can make the best possible decision for your needs.

For more detailed information about these changes, reach out to your Locations agent or visit facts.realtor.

Information for Home Sellers

The settlement introduces changes that provide more clarity around broker commissions. As a seller, here's what you need to know to make the most informed decisions when listing your property.

What’s Changed

• Your agent must clearly disclose to you, and obtain your approval for, any payment or offer of payment that they'll make to a buyer's agent.
• This disclosure must be made to you in writing in advance of any payment or agreement to pay another agent, and it must specify the amount of the rate or payment.
• If you choose to approve an offer of compensation, there are changes to how this can happen: 1) You, as the seller, can still offer compensation, but your agent cannot include it on the MLS; 2) Your agent can advertise your listing outside of the MLS (like social media, flyers and websites).

What Stays the Same

• You still have the choice of offering compensation, or payment, to the buyer's agent. You can think of this practice as a way of marketing your home to buyers.
• You can still offer buyer concessions on the MLS (for example, offering to pay the buyer's closing costs).
• Your Locations agent will help you to navigate the process of selling your home and work in your best interest. 
• Compensation for your agent remains fully negotiable. Your Locations agent will follow the Realtor® Code of Ethics and have clear, transparent conversations with you about compensation.
• You have choices! Work with your Locations agent to understand the full range of these choices when selling your home, so you make the best possible decision for your needs.

For additional details on these changes, visit facts.realtor.

We're Here to Help

At Locations, we’re here to guide you every step of the way on your real estate journey. Our goal is to ensure that you have the information and support needed to make confident, informed real estate decisions. Whether you’re buying or selling a home, our experienced agents are ready to assist you in achieving your real estate goals.

Contact us today to learn more about how we can help you to navigate these changes and make the most of your homebuying or selling experience.