RALEIGH, N.C. — There are possible changes on the horizon for the real estate market after a massive lawsuit settlement with the National Association of Realtors (NAR). Experts say, if the agreement is approved by a federal court, it could impact the way commission is negotiated for both a seller’s broker and a buyer’s agent.
Gretchen Coley, the founding principal of Compass North Carolina and team lead of The Coley Group, says the North Carolina real estate market is in great shape.
“Fortunately for us, we are either the number one or number two market in the country that people are migrating to,” Coley said. “Since January, our market has really turned on again and we are starting to see a huge uptick in people who are ready to come off the sidelines.”
Coley has more than two decades of experience in the industry and is extremely passionate about what she does.
“I’ve really enjoyed helping people achieve the American dream,” Coley said.
She’s been paying close attention to the recent lawsuit settlement by NAR. One part of the agreement could affect compensation for a buyer’s agent. Sellers would no longer be required to advertise that amount, usually around 5% to 6%, in the multiple listing service (MLS).
“Buyer’s agents now will have to talk with their buyers about making sure that they understand that if the seller is not compensating them, they will have to be paid by the buyer,” Coley said. “There will have to be some navigating of, does a buyer want to look at homes where a seller is not offering a commission?”
Coley says other than having to make extra phone calls, it wouldn’t really impact North Carolina because of the laws already in place here.
“I do think transparency is great for the consumer, but it’s not changing really the way we do business other than taking a field out of the MLS and saying that commission doesn’t have to be offered there,” Coley said.
“Is it a buyer that’s paying or is it a seller that’s paying? I think, in the end, the buyer is the one financing it. So if you think about how commissions have historically been paid, they’ve always been paid by the buyer. They just come off of the closing disclosure in the seller’s column. It’s all math, but they’ve always been financed in,” Coley said.
While the changes are still up in the air, Coley believes there’s the most potential to impact first-time homebuyers or people who aren’t familiar with how things work.
Buying a house is often the largest purchase of someone’s life, and Coley says it’s important there’s transparency during the process. She says, in the end, this could just add things to the list of negotiations that need to be agreed on.
“A lot of the talk is about this lowering the price of housing. I don’t think any of us think that that is going to be something that’s really going to happen. I think it’s going to put minority buyers and first-time homebuyers at a disadvantage,” Coley said. “Is it important for them to have representation in the largest financial transaction that they may ever do? I believe it is.”
Another part of the agreement could mean homebuyers have to sign an agreement with a broker before they start working together. Experts believe that could lead to some buyers deciding not to use a broker at all. But North Carolina is ahead of the curve on that part because those agreements are already required before making an offer.
Coley said, if you’re in the market, it’s important to do your research and have up front conversations with everyone involved.
If the new rules are approved by a federal court, they would go into effect around mid-July.