Greater Albuquerque Association of Realtors offers this advice in wake of NAR settlement

Morgan Cannaday, GAAR president and realtor with The Cannaday Team at Ida Kelly Realtors, responds to recent NAR settlement news.

By Meagan Nichols – Editor-in-Chief, Albuquerque Business First

Mar 19, 2024

Last week's National Association of Realtors settlement announcement grabbed the attention of real estate professionals everywhere, with many experts now forecasting seismic changes in the housing sector.

And while the $418 million settlement — aimed at pacifying class-action lawsuits that targeted NAR’s commission structure — still has a ways to go in the approval process, real estate agents across the U.S. are gearing up for what could be next.

For a better grasp on the potential local ramifications, Albuquerque Business First reached out to the Greater Albuquerque Association of Realtors for answers. GAAR representatives declined a phone interview and asked that all questions pertaining to the lawsuit be submitted in writing.

Below is an excerpt from that email interview between Albuquerque Business First and Morgan Cannaday, GAAR president and realtor with The Cannaday Team at Ida Kelly Realtors.

The interview was edited for brevity and clarity.

Albuquerque Business First: How is GAAR specifically responding to the NAR settlement?

Morgan Cannaday: It’s important to first note that the settlement has not yet been approved but in anticipation, the Greater Albuquerque Association of Realtors (GAAR) is focused on informing its members of potential changes brought by the settlement. This includes adjustments in how broker compensation is communicated and the necessity of written agreements with home buyers.

What do you think the NAR settlement will mean for New Mexico home prices? The settlement might not directly affect home prices in New Mexico, or anywhere else. It mainly changes how real estate compensation is handled and communicated, it does not change that Realtors are compensated for helping consumers navigate the most complex and largest financial transaction that most will ever make. Home prices are more directly influenced by supply and demand than anything else.

How do you recommend GAAR Realtors prepare for forthcoming changes? GAAR Realtors should familiarize themselves with the new rules, particularly the prohibition of offers of compensation on the multiple listing service and the requirement for written agreements with buyers. They should also be prepared to negotiate compensation directly with buyers, as this will become more common.

If 3% buyer commissions disappear or change, what is at stake for local Realtors? Commissions will remain negotiable and will continue to be paid, the only thing changing is how that compensation is communicated and negotiated. Realtors may need to adapt by negotiating commissions more frequently and exploring different compensation models.

Does GAAR anticipate the NAR settlement will lead to a drop in the number of local Realtors? It’s uncertain if there will be a drop in the number of local Realtors. Some may find the new environment more challenging, but the settlement also aims to preserve consumer choice and Realtors opportunities, which could maintain or even attract more professionals to the industry.

If someone wants to sell their house right now, what should they do? Realtors are still available and ready to provide our professional expertise in navigating the most complicated and expensive transaction that most consumers will make in their lives. Sellers should consult with a Realtor who understands the new rules. They should be prepared for potentially a different commission negotiation process and ensure that any agreements are documented and in line with the latest guidelines.

Anything to add? It’s important to note that while the NAR settlement brings significant changes, the primary objectives are to maintain consumer choice in real estate services and ensure fair practices across the industry. Realtors and consumers alike should stay informed about these developments to navigate the real estate market effectively. Remember, these answers are based on the settlement details and might evolve as the industry adapts to these changes.

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