A New Era of Real Estate
I have been decidedly quiet online about the NAR compensation lawsuits and the landmark changes to my industry. Offline, my thoughts have been almost entirely consumed by this for most of the year. There have been many nights I’ve spent tossing and turning, anxious about what’s to come after August 17th. I’ve attended dozens of meetings and sessions about the changes. I’ve brainstormed with my team. I’ve read the comments on news articles (note: must try to stay away from comment sections). I’ve strategized.
Nationwide practice changes are set to go into effect tonight at midnight. After months of preparation, my team and I are ready and equipped. We’re even excited (!) about it all. The New Era of Real Estate is all about providing transparency, education, and value to both home buyers and home sellers. These three pillars are at the very heart of Melanie Everett & Company.
First, let me back up and share the whole story.
What happened?
This year, the National Association of Realtors (our national trade organization, also known as NAR) settled a series of antitrust lawsuits by introducing new practice changes. The plaintiffs alleged that NAR rules, which allow for a listing agent to offer a blanket commission percentage to whichever agent brings the buyer, were creating an environment of inflated costs on the sellers’ side and limiting industry competition.
The settlement includes several practice changes that are slated to go into effect on August 17th.
What are the new practice changes?
There are several, but the main two changes are:
Offers of compensation are now prohibited on the Multiple Listing Service. Almost every MLS in the country, including Midwest Real Estate Data, has opted into the lawsuit and will remove the fields related to buyer-agent compensation at midnight. Listing agents and home sellers may still offer compensation to buyers and buyers’ agents, but it must be advertised off-MLS: social media, website, text/email, print marketing, etc.
Buyers must sign an agreement with their agents before viewing property. This is required by the National Association of Realtors for all members beginning tomorrow, and in Illinois, it will become a state law by January 2025. These agreements must specify a geographic location (like City of Chicago or Western Suburbs) and have an end date. They must outline the buyer agent’s professional fee. And lastly, they must be fully executed by both parties prior to starting showings.
Okay, wow. What has M&Co. been doing to plan for these changes?
At M&Co., we have been studying the playing field for many months — since last fall when industry chatter about the lawsuits really ramped up. We started slow: adding our sellers’ offers of compensation in our marketing, penning our M&Co. Pledge that lays out our firm commitment to buyers, and staying open and honest with our clients who had questions about how this would impact their home sale or purchase.
On the last day prior to the practice changes, I can confidently say that we are standing strong for our clients. We’re equipped with resources of all kinds, and we're thrilled to remain a trusted source for all things buying and selling. Here is what you can expect from us:
As a buyer…
Buyers, we are a firm that you can trust. When you reach out to us to kickstart your home search, we’ll begin by scheduling your consultation. This is a ~60-minute conversation where we’ll discuss you and your goals, explain the process at length, and lastly, talk through the concept of agency and what it means to hire an agent to represent your best interests.
From there, we’ll send you a follow-up email chock-full of M&Co. resources, as well as an agreement via DocuSign. As always, no pressure — sign it when you’re ready and come to us with questions. An added layer of confidence: These agreements can be cancelled at any time for any reason.
When vetting properties and making offers with you, we’ll first find out if the seller is offering compensation. If they are, we’ll draft an addendum to put it in writing. If they are not offering an up-front compensation, we can either negotiate that they pay it as a term of your offer, or you can choose to pay it directly at the closing.
The M&Co. team will remain closely by your side for the duration of the transaction, ensuring you hit every milestone from home inspection to clear-t0-close.
As a seller…
Sellers, we are a firm that you can trust. When you reach out to us to begin your home sale, we’ll hop on a call to discuss your timeline and goals at a high level, as well as explain the process. Most importantly, we’ll book a time for us to come and walk through your home with you. This allows us the first-hand knowledge we need to put together an extremely thorough pricing recommendation and strategy for listing. At this point, we’ll also speak with you about whether or not you should offer compensation to the buyer’s agent, and what it could look like. It’s a nuanced decision, and we want our clients to feel seen and heard.
Once we execute a listing agreement with you, we’ll get everything in motion to beautifully tell your home’s story: staging and styling, photos, description, custom seal, graphics, and more. We will list either privately or publicly from there.
At the time of offer review, we will have more components to weigh, such as buyer-agent compensation. We’ve been trained on new documents and we’re ready to talk through new addendums with our sellers.
Just like on the buy side, the team is committed to bringing you from contract to closing as seamlessly as possible.
If you’re thinking “this is a lot, Melanie…” — yes, it is a lot! This is my 10th year in real estate and undoubtedly the craziest one yet. I can’t say what the next few months will look like, but I do know one thing: Melanie Everett & Company is a firm you can trust. You can count on our transparency, education, and strong value that we bring to each and every transaction. I’ve never been prouder of my team (they’re making this pivot look easy!) and I know we’ll navigate these industry changes together, one transaction at a time.
