Do Miami Condo Buyers Now Have To Pay Broker Commissions?
Do Miami Condo Buyers Now Have To Pay Broker Commissions?
Florida Realtors® association General Counsel Juana Watkins recorded a video message explaining the repercussions of the newly implemented National Association of Realtors® $418 million settlement.
Florida’s residential real estate industry forever changed this week with the implementation of rule modifications resulting from the National Association of Realtors® $418 million settlement of “antitrust claims.”
The changes - which are the result of “claims brought on behalf of home sellers related to broker commissions” - went into effect throughout the country on Aug. 17, 2024, for the more than 1.5 million-member organization, according to an NAR statement.
The repercussions are huge in Florida where the statewide association has some 238,000 members. Of that, more than 60,000 members belong to the Miami Association of Realtors® and an additional 42,000 members are part of the Broward, Palm Beaches & St. Lucie Realtors® association.
Rather than add to the widespread confusion about commissions that already exists in the market, we are going to let Juana Watkins, the general counsel for the Florida Realtors® association, explain the changes in her own words in this video.
If you don’t want to watch the video, here is the transcript from some key portions of Watkins’ presentation.
“As you know, on March 15th, 2024, the National Association of Realtors® announced a proposed settlement agreement to end class-action litigation of claims brought on behalf of home sellers related to broker commissions,” Watkins said in the video.
“The settlement covered a number of crucial issues. Two of those issues have received a lot of attention in recent months, as these two issues have driven practice changes within our industry.
“NAR has set a deadline for members, multiple listing services and boards covered by the settlement to incorporate those practice changes into their businesses no later than August 17, 2024.
“The two issues of note are, first, NAR has agreed to prohibit offers of compensation on the multiple listing service.
“There will continue to be many ways in which buyer brokers can continue to be compensated, including through offers of compensation communicated off the multiple listing service.
“But using the multiple listing service to communicate offers of compensation is no longer an option.
“And the settlement provides that multiple listing service participants working with buyers must enter into written buyer agreements prior to touring a home.”
Watkins added: “Keep in mind that the language of the settlement is very broad and is designed to apply to all 50 states, but today we will personalize this to Florida.
“The terms of this buyer agreement are not specifically defined, but the settlement does give the required elements for written buyer agreements.
“The written agreement must include:
“1. A specific and conspicuous disclosure of the amount or rate of compensation the participant will receive, or how this amount will be determined to the extent that the participant will receive compensation from any source.
“2. The amount of compensation in a manner that is objectively ascertainable and not open ended.
“3. A term that prohibits the participant from receiving compensation for broker services from any source that exceeds the amount or rate agreed to in the written agreement with the buyer.
“4. A conspicuous statement that broker fees and commissions are not set by law and are fully negotiable.”
Watkins went on to say in the video that real estate agents who do not obtain signed buyer-broker agreements face the probability of not getting paid for their work.
If you have any additional questions, we suggest you reach out to your attorney or Realtor®.
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