In August 2024, Florida’s real estate transactions changed in significant ways that affected buyers, sellers, and real estate agents. Following several antitrust lawsuits challenging the standards for commission disclosure and payment, the National Association of Realtors (NAR) settlement became a turning point, enforcing more transparency in the ways buyers’ agents are compensated.
Whether you’re a home buyer planning to build a future in the Sunshine State or a real estate agent looking for resources on the matter, understanding the implications of this settlement is imperative to make the best of Florida’s housing market.
Let’s start with an overview of the NAR Settlement: Before August 2024, sellers typically offered a commission split to buyer’s agents through Multiple Listing Services (MLS). These are local marketplaces where buyer’s and seller’s agents would share information about homes for sale.
The NAR agreed to a $418 million settlement in order to introduce new rules around buyer’s agent commissions. The direct result is that offers of compensation can no longer be shared via MLS, even if they can still be communicated through other means. In other words, commissions are still negotiable, but buyers and agents must work out the agent’s compensation directly, without having it be baked into the seller’s side of the deal. Sellers may still offer compensation to the buyer’s agent, just not through the MLS.
For one, they must sign a written buyer representation agreement before touring homes with the agent. It should clearly specify the terms that the buyer has negotiated with their agent beforehand, which includes the agent’s duties, the duration of the agreement, and the compensation.
As outlined by the National Association of Realtors, the agreement should disclose the amount or rate of compensation the agent will receive or how this amount will be determined. The terms of the agreement can be negotiated to suit the needs of both buyers and agents; they can work with a short-term or long-term agreement, and the compensation can be either a flat amount, a percentage, or an hourly rate. What matters is that these terms are clearly specified in the agreement, avoiding open-ended statements.
This means that buyer’s agents can’t take more than what is being listed in their contract, regardless of what the seller offers on the side.
When it comes to paying said compensation, buyers have several options on the table.
Since a buyer’s agent compensation is part of the closing costs, the NAR settlement does affect your investment during closing. With that said, the extent of that impact depends on your negotiations with the agent and the agreement you reach regarding the compensation amount. Other closing costs (lender fees, taxes, and title insurance) remain unchanged, so you can still go into the process with an accurate estimate.
Multiple Listing Services are off the table for sellers, as well. While they still have options available if they want to attract buyers through offered agent commissions, sellers can’t make these offers via an MLS.
Sellers are not expected to pay buyer’s agent fees at all. This is one of many costs that can be negotiated before closing. The written agreement also pushes for more transparency in the overall process.
The closing doesn’t look too different, but net proceeds can still be affected, which is why sellers should have an accurate estimate of their profits from the start. A thorough review of the seller’s net sheet before closing is more important than ever.
What Buyers Should ExpectThe NAR settlement introduced significant changes, but the fundamentals of a Florida real estate closing remain the same. That means that buyers still need to fulfill the same standard steps: they need to start an escrow process and conduct a title search, preferably with the assistance of a local title company.
That same title company can help you understand the Closing Disclosure, a five-page document detailing the terms and charges you’ve selected for your mortgage loan. It itemizes every fee, from the amount you owe at closing to subsequent monthly payments. The key element is verifying that the information displayed in the document matches the terms offered by the lender during the negotiations.
Beyond that, the signing and recording of the closing are what you would expect from a standard home purchase transaction. A trusted title company will assist you through the different stages of the process, and its role isn’t affected in any way by the buyer’s agent compensation.
Not necessarily — it depends on negotiations with the seller. Typically, buyers have several options available, including asking the seller to cover the agent’s fees as a concession.
Yes, you’re not legally bound to seek a buyer’s agent. The decision entails navigating the negotiations on your own, without a trained eye to evaluate complex paperwork and local experience to navigate Florida’s market.
Builders have their own agents; the dynamics differ.
Potentially, depending on how agent compensation is structured in your contract. Other closing costs relating to lender fees, taxes, insurance, etc. are not affected.
Understanding every facet of the closing process is essential to preserve your peace of mind in the aftermath. If you have concerns about the ramifications of the NAR settlement, don’t hesitate to come to us with your questions.
For over 24 years, Key Title & Escrow has served countless clients with excellent statewide closing services. We’re ready to become the buyer’s best ally at the closing table, regardless of the standard commission framework.
We have experience working with buyer’s agents and real estate attorneys to ensure a smooth process with no miscommunication along the way. Likewise, you can trust our specialists to help you verify all the fees listed in the Closing Disclosure; you’ll understand the meaning of each of the costs involved and won’t be left wondering about any unexpected charges.
You can also count on us if you’re an international buyer. Our staff understands the difficulties of keeping up with U.S. commission structure, and we’re ready to provide all the counsel you need.
Give us a call or fill out the website’s contact form to get in touch with us. Our services are exactly what you need to ensure a successful real estate closing.
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