How Home Selling is Evolving in a Post-NAR Settlement World
What’s Changing for Sellers?
The recent NAR settlement and regulatory changes mark a significant shift in the real estate market, impacting how sellers approach the home-selling process. Whether you’re a seasoned seller or putting your home on the market for the first time, these adjustments will influence everything from commission structures to buyer interactions. Understanding these updates and strategically adapting to them can help you attract the right buyers and maximize your home's value?
Buyer Agent Commission Transparency & Seller Obligations
Traditionally, sellers have offered a commission to both the listing agent and the buyer’s agent as part of the Multiple Listing Service (MLS) rules. With the NAR settlement, these norms are shifting:
Sellers are no longer required to offer compensation to buyer agents in MLS listings.
Buyer agent commissions will not be automatically advertised in MLS listings. This means buyers and their agents must negotiate compensation separately.
You can still choose to offer buyer agent compensation, but it's now a more deliberate decision based on market conditions.
How This Affects Sellers
For decades, including a buyer’s agent commission in the MLS listing was a standard practice. The assumption was that by covering both agents’ fees, sellers would attract more buyers. However, the new regulatory landscape means that seller-paid buyer agent commissions are now optional, changing how sellers structure their listings.
Some potential outcomes for sellers include:
Greater flexibility in structuring sales costs. You can now choose to offer no buyer agent compensation, a flat fee, or a percentage-based incentive.
More complex negotiations. Without a standard buyer agent commission in place, negotiations between buyers and sellers may involve more back-and-forth over fees and closing cost assistance.
Potential impact on buyer traffic. Buyer’s agents may steer their clients toward homes where commissions are covered or negotiate commission costs as part of the deal.
How Buyers Are Navigating Commissions Now
With these changes, many buyers will need to directly negotiate their agent’s fee. Some potential outcomes include:
Buyers paying their agent out-of-pocket instead of having it included in the transaction.
Buyers requesting seller concessions to help cover their agent’s fee.
Some buyers going directly to listing agents instead of hiring their own representation.
How This Affects Sellers
As a seller, this means you may encounter more direct negotiations with unrepresented buyers or face requests for closing cost assistance. If more buyers opt to work without an agent, sellers may need to be prepared to navigate more of the transaction process themselves. While your listing agent can still represent you, sellers should be aware that unrepresented buyers may seek a price reduction or additional incentives since they are handling their own transaction costs.
Increased Competition for Buyer Attention
Since fewer listings will include built-in buyer agent compensation, agents may be less incentivized to prioritize properties without it. This means:
Homes with no buyer agent compensation may see less buyer traffic.
Homes that offer a competitive incentive might attract more attention in a shifting market.
Strategies to Maintain Competitive Edge
If sellers choose not to offer buyer agent compensation, they should consider alternative ways to make their property attractive, such as:
Strategic pricing: Listing the home competitively to appeal to buyers who may need to cover their own agent fees.
Offering closing cost credits: Instead of directly paying a buyer’s agent, offering a seller concession for closing costs can help buyers offset their expenses.
Marketing directly to buyers: Ensuring maximum exposure through high-quality online listings, virtual tours, and social media advertising.
Listing Agents’ Role is More Crucial Than Ever
Your listing agent will be key in adjusting to these changes. They will need to:
Develop stronger marketing strategies to maximize exposure to both buyers and their agents.
Educate buyers about the new commission landscape to prevent surprises in negotiations.
Help you evaluate the pros and cons of offering buyer agent compensation.
What to Look for in a Listing Agent Now
With these industry shifts, choosing the right listing agent is more important than ever. Key qualities to look for include:
Expert negotiation skills: Since buyer commissions are now more flexible, a strong negotiator can help structure deals that benefit sellers.
Extensive marketing strategies: Look for agents who invest in professional photography, targeted online ads, and direct outreach to buyers.
Experience with unrepresented buyers: Some buyers may choose to navigate the process without an agent, so your listing agent should be comfortable managing dual-agency scenarios or guiding sellers through direct buyer transactions.
What Sellers Should Do Moving Forward
As the real estate market undergoes significant changes, sellers need to be more strategic than ever. The new regulations require a fresh approach to pricing, marketing, and negotiation. Understanding these shifts will allow you to position your property effectively, attract the right buyers, and navigate the selling process with confidence.
1. Have a Pricing & Incentive Strategy
Work with your agent to determine:
Whether offering buyer agent compensation makes sense in your market.
How to price your home competitively without built-in commission costs.
Whether seller concessions, such as covering a portion of closing costs, could make your home more attractive.
2. Understand Buyer Expectations
Buyers will need to adjust to the new commission landscape. Be prepared for:
Requests for closing cost credits. Some buyers may ask sellers to contribute toward their agent fees.
More negotiations over price and fees. Without standard commissions, buyers may focus more on overall transaction costs.
Increased direct buyer inquiries. More buyers may reach out without an agent, leading to a need for clearer communication from the seller’s side.
3. Maximize Exposure
Ensure your listing is positioned for maximum visibility by:
Investing in high-quality photography and video tours to attract direct buyers.
Leveraging social media advertising and online real estate platforms to increase buyer interest.
Highlighting seller incentives upfront to address potential buyer concerns about commissions and fees.
4. Stay Informed
These changes are evolving, and real estate professionals are adapting to new best practices. Sellers should:
Regularly consult with their agent on market trends and best strategies.
Stay updated on buyer behavior shifts as the industry adjusts to the new regulations.
Be flexible in negotiations to accommodate new expectations from buyers and their agents.
The Bottom Line
The NAR settlement is bringing significant shifts to the home-selling process, but with the right approach, sellers can still achieve successful outcomes. Understanding these changes and working with a knowledgeable real estate professional will ensure you navigate this new landscape confidently and profitably.
By being proactive, sellers can maintain a strong position in the market, attract motivated buyers, and ultimately secure the best possible deal for their property. The key is to adapt to the evolving landscape, stay informed, and work with an expert agent who understands the new rules and strategies needed to succeed.