August 1^st, 2024, will be a memorable day in my career.  For 20 years I have served clients and friends in residential real estate and sales here in the southeast valley of metro Phoenix.  For most of that time real estate transactions were conducted under a model that when applied ethically and with clear communication worked well for the practitioners and the public.  It wasn’t perfect but it had proved to be an effective way to conduct business with each party enjoying representation and compensation to the brokers clearly outlined in advance.  That business model wasn’t the only one out there, but the bulk of transactions were conducted under it.

Over the last several months that business model has been challenged both in court and by the US Department of Justice.  Based on the outcome of the legal challenges and DOJ investigations into the National Association of Realtors and many of the nations MLS systems changes have been mandated to industry professionals who are members of the National Association, which most licensed agents, including myself are.

The changes are aimed at de-coupling buyer and seller agent commissions.  Under the new mandates we will see some changes and new requirements.  Most notably:  All NAR member agents that are showing ANY property to a prospective buyer, must have a written, signed buyer broker agreement in place with their buyer client.  This must be presented, explained thoroughly, and signed by the agent and the client prior to viewing the property. This will protect the buyer’s agents right to compensation for work performed on behalf of the buyer regardless of who pays it.  Secondly, no compensation to buyer broker information may be displayed on the MLS.  Previously a buyer’s agent would know the compensation offered by the listing brokerage just by looking at the listing.

Tere are some real benefits to the new system we will operate in and there are potential unintended consequences that may be detrimental to the industry and/or the public.  Time will tell on those but safe to say I have some concerns.

From our standpoint, we see tremendous value in buyers and sellers having professional representation to guide them through the transaction.  It is a beautiful thing when a good and professional buyer’s broker assists a buyer with the purchase of a home listed by a good and professional listing agent.  With quality representation and excellent communication, the result for both parties is always better.   We will continue to work hard, and ethically with our buyer and seller clients to help them achieve their real estate goals.  All the years of experience, training, industry leadership, community engagement and relationship development will continue to serve our brokerage, and our clients will into the future.

Here is an article that sheds more light on some of these changes:  ARTICLE

If you have questions about the new landscape and the changes that are being implemented and would like honest and educated counsel, we are  here to help.

Until next time my friends,

Mark Newman