As if there wasn’t enough in the news for us to read about this week, somehow realtors and residential real estate made front page news when the National Association of Realtors (NAR), the largest trade group of real estate agents in the country, settled a lawsuit with a group of buyers who sued the NAR. There are many news outlets you can search to read about the merits of the lawsuit. For the purposes of this article, though, what are the actual implications?
The short answer is that it’s a little too early to know for sure as the settlement may not be approved by the courts until the end of this year, many months from now and well after the spring market is over. The longer answer is that there will be two main changes as to how business is done and here is where I would like to make a specific prediction about our local northern New Jersey market and how business might change or perhaps, more likely, not change.
The first implication, and by far the most significant, will be that new listings normally published on the NJMLS, the main exchange for the brokerage community and the central nervous system for brokers/agents communicating with each other, will no longer allow disclosing the compensation being offered to a cooperating buyer’s broker (the agent representing the buyer). However, and this part is key, the ruling explicitly allows the specific commission to be published in other forums such as the listing company’s website or Facebook page. Of course you would be right to ask, what is the point of this new rule? If sellers can still offer compensation to a buyer’s broker as long as this information isn’t published on the NJMLS, but it can be found in other places, then what has changed? I think the answer is quite emphatically—nothing!
As a broker for over 30 years I won’t let anyone convince me that it’s in a buyer’s best interest to pay for representation out of their own pocket as opposed to the current standard practice. Sellers understand and believe the importance of inviting the brokerage community to present a suitable buyer for their property and thus offer compensation out of the total sale price for their efforts. In other words—they understand that cooperation is key. The total commission paid by the seller doesn’t change and it incentivizes all agents to bring in their buyers.
As for me personally, who at this stage in my life is predominantly involved with listing homes and hasn’t taken a 6% commission in years, maybe decades, I will absolutely have our office continue to advocate that seller offer a commission to the buyer’s broker. This ensures that the agents of this community continue to work diligently and successfully in guiding their buyers from showing, to offer, to negotiation, to inspection, to contract and ultimately to closing.
To quote someone who once said it right—You get what you pay for!
Nechama Polak is the broker of record and owner of V&N Group LLC,located at 1401 Palisade Avenue in Teaneck. Send your thoughts and comments to [email protected] or call 201 826 8809.
