What a national Realtor settlement means for Maryland homebuyers – The Baltimore Banner

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Home buyers and sellers in Maryland might be thinking closing costs and commissions will get cheaper after reading national headlines this past week about a multimillion-dollar Realtor settlement. Not so fast — many of the protections in the proposed national settlement are already in place in Maryland.
Multiple real estate lawsuits claimed that the industry inflated fees to keep agent commissions high. Now, the National Association of Realtors has said that it will change policies to make it easier for homebuyers to negotiate fees with their agents, a move that could lead more buyers to forgo using agents altogether.
As part of the settlement, announced Friday, the NAR agreed to no longer require a broker advertising a home for sale to offer any upfront compensation to a buyer’s agent. Currently, real estate agents working with a buyer and seller typically split a commission of around 5% to 6% that’s paid by the seller.
To put it plainly, home sellers will no longer automatically have to cover this commission fee for both sides of the transaction.
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The NAR also agreed to pay $418 million to help compensate home sellers across the U.S. If the settlement is approved, the national association could implement changes in July.
However, Marylanders should bear in mind that buyer and seller fees in the state were already negotiable, said Greater Baltimore Board of Realtors President Brian McGeehan. But these changes will make agents work harder to ensure that consumers understand the process and fees related to buying and selling a home.
“We want consumers to understand what they’re committing to and how it impacts them,” McGeehan said.
Since 2016, Maryland has been one of 17 states with a law that requires the use of written buyer brokerage agreements, basically a contract that outlines terms between a buyer and the real estate agent. The proposed settlement could be a big change for states that don’t already have these buyer protections in place, said Chris Hill, president of Maryland Realtors, the state’s member-directed association that supports over 32,000 Realtors.
“Marylanders are already familiar with buyer brokerage,” Hill said. “But as for cooperative agreements with their brokerages, the new rule requires that commission amounts no longer be included in the multiple listing services description of the property.”
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Under the new NAR agreement, Multiple Listing Services — a tool agents use to look up property details — would leave it open for individual home sellers to negotiate offers with a buyer’s agent outside of the MLS platforms, though the home seller’s broker has to disclose any compensation arrangements.
Hill said he’s talked to at least 100 agents since Friday, and the overwhelming response has been that “good professional Realtors are trying to protect the consumer.”
“They want to make sure that their clients are protected. And and that’s what buyer’s agency does for us — it allows the buyer to be protected as well as the seller,” he added.
With Maryland already compliant with half of the settlement’s proposal, McGeehan said, regionally, these changes will have the most impact on first-time, low- and middle-income homebuyers. For a family of four with a household income, making $150,000 or less, it can be taxing to make a decision to have an agent or not, McGeehan said.
“What we’re going to see is buyers deciding between whether to have professional representation in this large life-changing purchase, or forgoing it because they’re not sure if a seller would compensate it,” McGeehan said.
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He also thinks more pressure will be placed on real estate agents to show and explain their value to buyers.
“For most people, these are the largest financial investments that they’re ever going to make. And whereas an average person might do it, two or three times in a lifetime, if even that much, having an agent who understands those intricacies can save real dollars for both sellers and buyers,” McGeehan said.
McGeehan described the current housing market as “very seller-favorable,” but added that he believes, in the next decade, the market will balance and shift. When there are more homes on the market, sellers may be more willing to compensate a buyer’s agent, he said.
Hill offered the a similar sentiment, saying that “in real estate, there are two sides to each transaction.”
“Maryland Realtors stands behind the need for the seller and the buyer to be represented by a professional who knows the market, the communities, how to get a home ready for sale, and how to get a buyer to qualify for financing. Consumers benefit when both sides are represented by a Realtor, each looking out for the best interests of their clients,” Hill added.
Associated Press business writer Alex Veiga contributed to this report.
Penelope Blackwell
penelope.blackwell@thebaltimorebanner.com
Penelope Blackwell is a Breaking News reporter with The Banner. Previously, she covered local government in Durham, NC, for The News & Observer. She received her bachelor’s degree in journalism from Morgan State University and her master’s in journalism from Columbia University's Graduate School of Journalism. 
Business
© 2024 The Baltimore Banner. All Rights Reserved.
Use of this site constitutes acceptance of our Terms of Service and Privacy Policies.
The Baltimore Banner may receive compensation for some links to products and services on this website. Offers may be subject to change without notice. See our Cookie Policy, RSS Terms of Service, Submissions Policy, Ad Choices, Do Not Sell My Personal Information, and CA Notice at Collection at Privacy Notice.
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The Baltimore Banner is a trademark registered in the U.S. for The Venetoulis Institute for Local Journalism, a 501(c)(3) nonprofit organization.
Click here to learn more about supporting local journalism.

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