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Buyer Representation Continues Amid Sitzer/Burnett Verdict

According to the National Association of Realtors (NAR) attorneys at NAR NXT, The Realtor® Experience event in Anaheim, California, the recent Sitzer/Burnett verdict does not prohibit the practice of making offers of cooperating compensation. Instead, listing brokers continue to determine the compensation to offer in the best interest of their sellers. The negotiation of this compensation remains between brokers and their clients.

Transparent Conversations with Clients

Real estate professionals should maintain clear communication with clients about the services they provide and how they get paid. NAR Chief Legal Officer Katie Johnson encourages professionals to continue using buyer representation agreements, which offer opportunities for important conversations with consumers about their value, the services they provide, and how they will work in the client’s best interests. Additionally, she stresses the importance of emphasizing the negotiability of their compensation in every transaction.

Johnson explains that when working with selling clients, professionals should inform them about their choices regarding the compensation of the buyer’s agent. This compensation can be paid through an offer from the listing agent, by the seller, or directly by the buyer, or a combination of these sources. It is crucial to let sellers know how offering compensation to the buyer’s agent works in their favor, as it makes the home purchase more affordable for buyers and broadens the pool of potential buyers for the property.

No Standard Amount for Agent Compensation

Johnson reiterates that agent compensation has always been negotiable and that there is no standard or set amount. NAR does not dictate the amount that agents should charge. She advises professionals to continue using listing and buyer agreements to help clients understand the exact services and value they provide and, importantly, the cost of these services.

She suggests three main categories for professionals to keep in mind when discussing compensation with clients:

  • Choice: Include information about agent compensation choices in future marketing plans and conversations with consumers.
  • Clarity: Ensure marketing materials, talking points with clients, training, and other communication channels provide clear information about the services provided and what the consumer can expect when working with the professional.
  • Opportunity: Use this time to differentiate yourself in the market, improve real estate practices, and think creatively about solutions. Johnson says, “Use this delta as a launch pad for innovation. This is a pivotal moment to maximize transparency.”

Legal Next Steps

In the meantime, NAR is filing post-trial motions to seek a complete reversal of the Sitzer/Burnett verdict and request a new trial, according to Lesley Muchow, the association’s general counsel and vice president of legal affairs and antitrust compliance. If unsuccessful, NAR will advance its appeal to the Eighth Circuit Court of Appeals. “We believe in buyer representation; it’s very important to both buyers and sellers alike,” says Muchow.

NAR Senior Counsel and Director of Legal Affairs Charlie Lee emphasizes the importance of real estate professionals having a meaningful impact on public discourse around real estate compensation. He urges members to “help us in the court of public opinion” by combating misinformation and providing reliable information to the public. Lee encourages professionals to continue focusing on their clients and serving them well.

Source: National Association of Realtors®, Realtor magazine

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Orginal article: Link To Article – provided by Kansas City Realtors