Arizona Home Buyer NAR Settlement FAQ
If you are considering buying an Arizona home and have questions about how the NAR (National Association of Realtors) lawsuit result will affect your home buying experience, then we are here to answer your questions.
FAQ
Under the terms of the settlement, agents will be required to use a Buyer Broker Employment Agreement–this agreement, amongst other things, will outline the amount of compensation that will be paid to the agent if he/she assists you in finding and closing on a home. The amount of compensation is negotiable and could be paid in a number of ways including payment from the buyer, concession from the seller or shared compensation from the listing agent. No one really knows how buyers will be affected by this major change.
This has always been an option and will continue to be in the future. Keep in mind that if you go direct to a listing agent, the listing agent may not be willing to reduce their fee if he/she is asked to also represent you; moreover, dual agency may not be right for you if you need someone to fight for your best interests. If you choose to represent yourself, be prepared to produce your own contract, find relevant sales, negotiate the offer, open escrow, order inspections, negotiate repairs, follow-up with the lender and title company, etc. If you are considering a home purchase, an experienced buyer’s agent can add a tremendous amount of value.
Agents are not allowed to steer clients in any way–not to certain areas and not only to homes where the listing agent is offering a fee (which will have to be advertised off the MLS)–the exception would be in a situation where the buyer instructs the agent to only show homes where the agent will earn a fee from the seller. Generally speaking, your agent should show you any home that you wish to view and the Buyer Broker Employment Agreement will outline how your agent will be paid.
Yes. As a result of the NAR settlement, all buyers or renters must sign a Buyer Broker Employment Agreement before viewing any homes. There is another form that can be used if you have not yet hired the agent formally, but wish to view a few homes. The Buyer Broker Employment Agreement is not a new form. The reality is that under the old system, buyer’s agents were guaranteed compensation if they showed and sold an MLS listed property where compensation (via the MLS) was offered. The main change now is that the form must be used and an agents compensation must be clearly spelled out.
Maybe. If you are working with an agent and he/she is going to accompany you to the open house, then a form must be signed. If you just walk into another agents open house unaccompanied, you do not need to sign anything.
The following information comes directly from the NAR website.
1) A specific and conspicuous disclosure of the amount or rate of compensation the real estate agent will receive or how this amount will be determined.
2) Compensation that is objective (e.g., $0, X flat fee, X percent, X hourly rate)—and not open-ended (e.g., cannot be “buyer broker compensation shall be whatever the amount the seller is offering to the buyer”).
3) A term that prohibits the agent from receiving compensation for brokerage services from any source that exceeds the amount or rate agreed to in the agreement with the buyer.
4) A conspicuous statement that broker fees and commissions are fully negotiable and not set by law.
Here are some sample forms that you might want to review before hiring an agent.
Below is a detailed list of FAQ’s direct from the National Association of Realtors.
The NAR settlement affects both buyers and sellers, but in our opinion, buyers will be affected most by the recent changes. There are many moving parts to the settlement and even industry pros are still undecided as to how this will affect consumers. As professionals who look out for the best interests of our clients, we are here to help you with your Arizona home purchase and to answer any questions you might have about the NAR settlement and the home buying process.
