The National Association of Realtors (NAR) recently implemented a rule that prevents the public disclosure of buyers’ agents’ commissions. While this aims to increase fairness and transparency in real estate transactions, its impact on the industry might be less significant than anticipated. Here’s why:
The New Rule Explained
The new NAR rule stipulates that the commissions paid to buyers’ agents are not to be publicized. This measure is intended to provide a more level playing field, preventing the commission rates from influencing buyers’ choices overtly. However, the effectiveness of this rule depends on the practices of individual agents.
Why Little Might Change
Despite the rule’s intentions, certain behaviors and practices might continue to undermine its goals:
- Commission Inquiries: Agents often inquire about commission rates before showing properties to clients. This practice is likely to continue, meaning that agents could still prioritize listings with higher commissions, even if these commissions are not publicly disclosed.
- Steering Based on Commissions: The issue of steering clients towards higher-commission properties remains. If an agent is inclined to prioritize their earnings, they might still influence buyers’ decisions subtly, regardless of the rule.
Ensuring Ethical Practices
For consumers, ensuring ethical behavior from their agents is crucial. Here are some proactive steps to take:
- Open Discussions: Before engaging with an agent, discuss their commission practices. Ensure they commit to not steering you based on commission rates.
- Commitment to Ethics: Seek out agents who adhere to high ethical standards. The National Association of Senior Advocates (NAOSA) promotes Gold Standards of Professional Practice in various industries, including a commitment from real estate agents not to steer clients based on commissions. Choosing a NAOSA member can provide additional assurance of ethical behavior.
- Transparency and Trust: Foster a transparent and trusting relationship with your agent. Confirm that they are dedicated to serving your best interests rather than just seeking higher commissions.
Conclusion
The new NAR rule on buyers’ commissions is a positive step towards enhancing fairness in real estate transactions. However, its true impact will largely depend on the ethical practices of individual agents. As a consumer, it’s essential to engage in open conversations with your agent about their commission practices and choose professionals who follow ethical standards, such as those set by NAOSA. By doing so, you can ensure a more transparent and fair real estate experience.
For more information on ethical real estate practices and to find trusted professionals, visit the National Association of Senior Advocates.
