What is the NAR Settlement? What does it mean for buyers and sellers in Ontario? Get the facts!
You’ve seen in the media stories about the NAR Settlement, the National Association of Realtors.
Today, I got a couple of calls from clients asking me about it. Well, we have been paying attention to this.
We recently went to a conference in the US where this was a topic of conversation, and we have many realtor friends down there, so we understand what’s happening with it. I think what’s important for us in Ontario to know are the differences, and there are some facts I want to share with you about how things work here.
So, first of all, real estate commissions are completely negotiable. When you meet with a realtor, either as a buyer or a seller, you will discuss the services they offer and the skills and expertise they bring to the table, and you will negotiate what you are willing to pay for those skills and services.
You may hear in these news stories about fixed commission rates and things like that. That is not the case here in Ontario. The other part of the settlement in the US is that all agreements with buyers and sellers must be in writing.
Well, in Ontario, that has been the law for a very long time; buyer and seller agreements are always in writing, and they always clearly specify what is being paid and by whom. So, in a buyer agreement, for example, when you sign, you agree that your realtor deserves to be paid and agree to make that payment.
The exception is when a seller offers a cooperating commission to the cooperating brokerage, the buyer’s brokerage, or your agent, which offsets your responsibility to pay your agent with sellers. When we discuss a commission, we discuss the total commission charged to sell your home.
Then, we clearly identify what portion of that commission is offered to the buyers. So much of what has happened in the US could have been avoided if they had these processes. And do you have to offer a buyer commission as a seller? No, you don’t. And that’s something we should discuss because it may disadvantage you in the marketplace.
If you’re not offering a buyer commission, it may eliminate some buyers from being able to buy your home. If you’re curious about what I’m talking about there, contact us and we’ll discuss it.
Watch the market update here
