New Paradigm in Houston Real Estate: What Buyers, Sellers, and Agents Need to Know
The Houston Association of Realtors (HAR) is readying for a significant shift in the industry as new rules impacting home buyers, sellers, and real estate professionals take effect on August 17. These changes stem from a nationwide settlement by the National Association of Realtors (NAR), aiming to reshape real estate transactions.
HAR aims to keep the public informed about these changes, breaking them down to get a better understanding of their impact on all parties involved.
Key Changes Affecting Buyers and Sellers
Starting August 17, buyers are required to sign a written agreement, such as a Residential Buyer's Representation Agreement, before a property can be shown to them. This change aims to clarify the agent's role and responsibilities, giving buyers a better understanding of the agent's services and value.
A significant change includes the removal of all compensation fields from the Multiple Listing Service (MLS) as of August 16 to comply with the settlement. This transition means buyers will need to discuss compensation directly with their chosen agent.
The relevance of negotiation stands firm. Compensation remains negotiable and should always be conducted between agents and their clients. To further facilitate transactions, sellers now have the option to contribute to buyer expenses, such as closing costs.
The Department of Veteran Affairs has also announced a policy adjustment allowing VA buyers to compensate their buyer broker directly.
"We are taking every step necessary to comply with the terms of the settlement," said HAR Chair Thomas Mouton. "The exact impact of these changes will become clearer after implementation, and HAR will provide ongoing resources to educate both buyers and sellers."
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The NAR Settlement Background and Implications
In March 2024, the NAR entered into a nationwide settlement following commission lawsuits brought forward by sellers across the country. Consequently, HAR is required to implement some rule changes by August 17.
The settlement includes the agreement for NAR to pay $418 million to settle the lawsuits, the repeal of the commission-sharing policy, and the introduction of new rules.
The HAR MLS, part of a network that includes NAR, the Texas Association of Realtors, and approximately 1,800 local associations/boards, will experience some changes as a result of the settlement. One key change is the removal of all compensation fields from the HAR MLS.
Guiding Consumers Through Changes
To facilitate the navigation of these changes, HAR has launched the Reality of Real Estate, an online hub provides home buyers, sellers, and agents with the facts about how the settlement will impact them. The site features resources such as guides, FAQs, financial tools, and videos in both English and Spanish.
HAR reiterates the importance of communication with trusted real estate professionals for further guidance on these changes. As the industry adjusts to these new practices, HAR continues to serve as a resource for all real estate needs.
Despite the changes, the settlement does aim to preserve the choices consumers have regarding real estate services and compensation. The final approval by the court for the settlement is not expected until late 2024.
Tiffany Krenek has been on the My Neighborhood News team since August 2021. She is passionate about curating and sharing content that enriches the lives of our readers in a personal, meaningful way. A loving mother and wife, Tiffany and her family live in the West Houston/Cypress region.
