August is ending...and real estate survived!

For months most everyone in the real estate industry talked about the coming imposition of practice changes as a result of a settlement between the National Association of Realtors and a class of home sellers in Missouri.  Here at Quinn & Wilson, we spent many meetings training on new forms, building new consumer materials, and discussing the best ways we could help our buyers and sellers continue to make a valuable real estate market in Pennsylvania.

Well, August 17th…the date the practice changes were to go into effect across the country, came and went and we were prepared. Now as we exit August it is time to reflect on what it is we have seen, and what opportunities we believe exist in this new real estate marketplace.

If you have not yet read about the NAR Settlement, you may want to take a moment to review either our Q&W Guide For Sellers or our Q&W Guide for Buyers that explains what happened and what it means for you.  If you are interested in more data, we also have our 16-page whitepaper that dives deep into the relationship between Realtors, regulators, and the courts. 

Pennsylvania REALTORS® started using new forms on August 1st in advance of the practice change deadline. In the month that has passed we have seen contracts of every type on our listings, and have written contracts of every style for our buyers. Here is what we can share from our experiences:

• A majority of our contracts this month still involved Cooperating Offers of Compensation.  That means the Seller agreed up-front how much they would pay from their proceeds to the Broker that brought the buyer.
  
  
• At least one of our sellers decided not to offer Cooperating Compensation (which is now permitted by the NAR Settlement and new MLS rules) and then negotiated a Concession (giving money directly to the buyer) for the purposes of paying their agent.
  
  
• At least one of our buyers requested a Concession in their purchase agreement for the purposes of paying their buyer agent when a Cooperating Offer of Compensation from the Seller was not sufficient to meet the amount the buyer and his/her agent had agreed to before they started touring homes. This “blended model” of paying agents is not new but was rarely used in the past.
  
  
• At least one of our buyers had their request for a Concession rejected during the negotiation of the purchase agreement. Just like any other counter-offer that may have been made (price, settlement date, inspections, etc) the buyer weighed the impact of the seller’s decision, and determined that in order to get the property they wanted they were comfortable adding the buyer agent’s fee to their closing costs. 

If you want to read more about these terms you can also visit NAR's resource page.

The last observation that we have seen during the month of August is that many, many real estate agents are still struggling with these new concepts and forms. That is why we have offered our Local Agent’s Guide to the NAR Settlement to help make everything smooth. This is a resource that can be shared to anyone in our marketplace.  

Here’s to September.  Mortgage rates continue to fall, more homes are coming available, and the outlook for 2024 and into 2025 looks robust. Please don’t hesitate to contact us if you want to learn more about buying or selling in this new environment.