The new policies that real estate agents must follow, as dictated in the NAR settlement, go into effect on August 17, 2024. I want to share my thoughts and how they will likely affect homebuyers and sellers in Wisconsin, but I first need to clarify that my perspective does not represent Keller-Williams and I am not a legal professional. My insights stem from decades of working in the real estate business in Northeastern Wisconsin. My thoughts and opinions are my own.
Let’s Review: What is NAR?
The NAR settlement is a response to the Sitzer/Burnett trial in Missouri. Central to this settlement is the desire to clarify for all parties involved – sellers, buyers, and agents – who pays the commission and how it’s broken down.
Every state handles Real Estate transaction paperwork differently. Luckily for all of us, Wisconsin’s approach to Real Estate transactions has always been ahead of the curve!
Long before the discussions that led to the Sitzer/Bernett investigation, our state had implemented practices to establish greater clarity and transparency in agent commission payments within Real Estate transactions. This proactive stance means that, in many ways, Wisconsin’s real estate practices are already aligned with the changes being proposed on a national scale.
Update in August: What’s Happening with NAR?
Things are still contentious, as the Department of Justice is getting sued and NAR itself is challenged. In our world, we haven’t seen any huge changes, since Wisconsin was already ahead of the curve.
For example, we’re the only state that does not allow Zillow to list “for sale by owner” properties, because we have a broker law. As a broker (like Zillow), if you’re listing a property, you have to have been in that house physically before you can list it. This Wisconsin law exists to make sure the house exists, the seller exists, and is a safety check to make sure everyone is who they say they are. It gives the broker additional fiduciary responsibility.
As NAR begins to take effect, the biggest change we’ve seen is that all buyers must work with an agent, just like all sellers should. As a buyer, you need to interview your agent and have a clear understanding of how their commission works.
Another change is that we can’t post the commissions we’re paying the buyer (or brokers) on MLS, like we could in the past. NAR prohibits this because they don’t want agents steering buyers to houses based on commissions. But in my opinion, this is removing all transparency and leaves room for bad actors.
Could the Department of Justice’s actions bleed over into other industries, hindering commerce? Only time will tell.
