If you’ve been in real estate long enough, you know this truth—our industry thrives on constant change. Just when we’ve adjusted to one trend, another one rolls in and shifts the way we work. The NAR Settlement, which came into play on August 17, 2024, is a perfect example. It’s not just a new rule—it’s a game-changer. And if you haven’t felt its ripple effects yet, trust me, they’re coming.
Now add rise and fall of interest rates, today’s unpredictable economy, and the quirks of local market conditions into the mix. Realtors, we’re in new territory. But here’s the thing—you can navigate this, and more importantly, you can thrive. By understanding these shifts, you’ll be in the driver’s seat, helping your buyers and home sellers make the best moves in this new market reality.
What’s the Deal with the NAR Settlement Agreement?
First off, the NAR Settlement made headlines when it introduced transparency around buyer-agent fees. For years, these fees often sat hidden in the shadows. Now? Buyers see exactly what’s being charged, making them more aware—and more calculating—when negotiating home purchases. Buyers will now need to negotiate compensation with their buyer agents directly, rather than it being automatically covered by the seller's commission, significantly altering the dynamics of real estate transactions.
This doesn’t mean buyers have turned into cold-hearted negotiators, but they’ve gained leverage. Transparency has given them a front-row seat to numbers they didn’t think about before. And this shift in power is showing up in the data.
Impact on Buyer Broker Compensation
The NAR settlement agreement has turned the spotlight on buyer broker compensation, bringing significant changes to the forefront. Traditionally, buyer brokers included their compensation details within the Multiple Listing Services (MLS) databases, often leaving home buyers in the dark about the exact fees involved. However, the new rules mandate a shift towards transparency and fairness.
Under the settlement, buyer brokers must now negotiate their fees directly with home buyers. This change is poised to foster a more competitive environment, potentially driving down broker commissions. For home buyers, this means a clearer understanding of what they are paying for and the ability to shop around for the best deal. For buyer brokers, it’s a call to adapt—offering more value and justifying their compensation in a market that’s becoming increasingly transparent.
The Numbers Don’t Lie—Here’s What They’re Telling Us
I took a long, hard look at data from Atlanta, covering August to October from 2019 to 2024. The trends tell a clear story, and it’s one we can all learn from as realtors. Comparing these trends to the local market performance of Atlanta United provides additional insights.
1. Sale-to-List Price Percentages Are Dropping
Okay, remember the days when just about every house sold for 100% (or more) of its list price? That was the norm for years:
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2020 to 2023 was a seller’s dream. Houses were snatched up at asking price, often with no questions asked.
Things changed in 2024. For the first time in years, the percentage of list price dropped below 100%:
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August 2024: 99.5%
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September 2024: 99.4%
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October 2024: 99.2%
Those numbers may seem small. But in a market where every dollar counts, this shift reflects larger changes. Buyers are taking the driver’s seat—asking for lower prices or walking away if they don’t feel like they’re getting the value they want. The NAR Settlement has also influenced pricing strategies, particularly with the requirement for sellers to offer compensation to buyers' agents, contributing to these market dynamics.
2. Properties Are Sitting Longer
Remember when you told sellers, “Get ready, your house will probably sell in a week”? That’s no longer holding up in 2024. The days on market (DOM) have climbed, and it’s clear buyers aren’t rushing anymore.
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In 2021, properties lasted just 7-8 days on the market before getting offers.
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Now, in 2024, we’re looking at 21, 24, and even 26 days in August, September, and October.
What’s behind this? Buyers are cautious—scrutinizing properties more and weighing their options. They’ve got more info (thanks, NAR Settlement), and with higher mortgage rates, every decision feels heavier. In Orlando City, market comparisons show similar trends, with buyers exhibiting careful behavior.
3. Sale Prices Are Leveling Out
One thing hasn’t budged much in 2024—the median sale price. Across August to October, Atlanta’s sale prices have hovered between $399,945 and $406,995. For home sellers and realtors, this stability is both good and bad news.
The good? Prices aren’t tanking. The bad? That steady climb we saw in previous years seems to have hit a ceiling. Home sellers will need strong strategies to make their properties stand out, especially with buyers being pickier and homes taking longer to sell.
What’s Driving These Shifts?
Several forces are working together to reshape buyer-seller behavior. If you’re working with clients, these are the big factors you need to explain (in plain English, please) to help them understand what’s happening. One significant change is the recent shift in commission structures following the NAR settlement. Buyers will now need to negotiate compensation with their buyer agents directly, rather than it being automatically covered by the seller's commission. This change significantly alters the dynamics of real estate transactions.
Interest Rates
Interest rates aren’t a small hurdle—they’re a brick wall for many buyers. A few years ago, rates around 3% made homeownership feel attainable and worth the bidding wars. Now, with rates climbing higher, buyers are asking, “Can I even afford this?”
Fewer buyers in the market means less competition, which is giving the power back to those who can still afford to shop. They’re in no rush—and they’re willing to ask for lower prices or wait for the right deal. Additionally, the requirement for sellers to offer compensation to buyers' agents can further complicate decisions, as it contributes to higher overall costs.
Economic Conditions
Every headline about inflation or the job market hits homebuyers differently. For many of them, the uncertainty means hesitation. Buying a home is a massive financial leap, and today’s economy doesn’t exactly scream, “Go for it!”
This puts realtors in a tricky but powerful position. Your job now? Help buyers see the long-term stability of owning a home, even in unpredictable times. Paint the picture of how this investment works—not just today, but in five or ten years. Additionally, home sellers must adapt their strategies to these economic conditions, focusing on transparency and realistic pricing to attract cautious buyers.
Local Markets and Multiple Listing Services
Real estate might follow national trends, but what’s happening locally holds more weight. Atlanta, for instance, has seen steady median sale prices, but lengthier DOM and steeper sale-to-list discounts mean we’re still in a period of adjustment.
If you’re selling in high-demand neighborhoods, buyers might still come ready to make competitive offers. But in slower areas? Expect them to take their time and negotiate their way to a lower price point.
Transaction Brokerage Explained
Transaction brokerage is a term that’s gaining more attention in light of the NAR settlement. Essentially, it refers to the role of a real estate agent or broker in facilitating a transaction between a buyer and a seller without representing either party exclusively. The new rules introduced by the settlement have significant implications for this practice.
Real estate agents and brokers engaged in transaction brokerage will now need to disclose more information to their clients. This includes detailed explanations of their compensation structures and any potential conflicts of interest. The goal here is to level the playing field, ensuring that all parties involved in a real estate transaction are fully informed. This increased transparency is designed to build trust and promote fairness in the industry, making it crucial for real estate agents to be upfront and clear about their roles and earnings.
The Role of Buyer Brokers in the New Market Reality
The NAR settlement agreement has ushered in a new era for buyer brokers, fundamentally altering their role in the real estate market. With the elimination of the Buyer Broker Commission Rule, buyer brokers can no longer rely on the traditional methods of securing their fees. Instead, they must negotiate directly with home buyers, a shift that demands a more competitive and transparent approach.
In this new market reality, buyer brokers will need to offer more value-added services to justify their compensation. This could mean providing enhanced market analysis, personalized property searches, or superior negotiation skills. The emphasis is on innovation and consumer-friendly business models, pushing buyer brokers to rethink their strategies and adapt to a landscape where home buyers are more informed and discerning than ever before.
What Does This Mean for Us as Real Estate Agents?
Now that you’ve got the data, what’s next? Knowing all this is only half the battle. The real question is—how are you going to lead your buyers and sellers in this post-settlement, unpredictable market? Realtors must now adapt to the new dynamics where buyers will need to negotiate compensation with their buyer agents directly, rather than it being automatically covered by the seller's commission. This shift requires a strategic approach to ensure both buyers and sellers understand the implications and navigate the changes effectively.
For Sellers
Your home sellers are used to hearing, “Put it on the market and it’ll sell.” That’s not always the case now. Here’s what you need to do for them:
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Set realistic expectations. Explain why market conditions have shifted and what that means for their asking price. Home sellers need to understand the current landscape to avoid disappointment.
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Help them with timing. Be honest. Houses may sit for weeks now, but a good strategy will get them sold eventually.
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Market aggressively. You can’t just rely on a nice listing anymore. Use targeted ads, social proof, and local market insights to position the home as the obvious choice.
For Buyers: Understanding Buyer Broker Compensation
Buyers today are careful planners. They’re not rushing, and they’re not afraid to push back. Here’s how to work with them:
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Leverage the data. Show them how the lower sale-to-list percentages and longer DOM can help them negotiate better deals. Explain how recent changes in commission structures mean they will need to negotiate compensation with their buyer agents directly.
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Answer their questions about rates. Talk about locking in rates, refinancing later, and staying within their budget. Your guidance matters more than you think.
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Be their advocate. Buyers today want someone on their side, helping them feel confident about their purchase. Buyer agents play a crucial role in this, especially with the new dynamics in real estate transactions.
Timeline and Implementation
The NAR settlement agreement is set to roll out in phases, with the new rules taking effect on August 17, 2024. This timeline applies to all MLS participants, marking a significant shift in how real estate transactions are conducted. The settlement also includes a provision for final approval, which is anticipated in the coming months.
For real estate agents, home buyers, and sellers, this means preparing for changes that emphasize transparency and fairness. The National Association of Realtors has committed to implementing these new rules and ensuring a smooth transition for all parties involved. As the industry adapts, home buyers and sellers can expect a more open and competitive market, where informed decisions are the norm and the role of real estate professionals evolves to meet these new standards.
The Bottom Line
The NAR Settlement has pulled back the curtain on how real estate works. We’re in a more transparent, buyer-driven market than we’ve seen in years, and all of us—buyers, sellers, and realtors—are adjusting. The requirement for sellers to offer compensation to buyers' agents has been a significant factor in these changes, contributing to inflated broker commissions and higher overall costs for home sellers.
But here’s what I know about good realtors like you—we adapt. We find a way to thrive no matter what the market throws our way. Use this data, stay educated, and keep being a trusted advisor. Buyers and sellers need our guidance now more than ever.
And if you take anything from this, remember this—change isn’t a bad thing. It’s an opportunity to grow. Let’s make the most of it.
