Lawsuit settlement will affect the house buying process in New Mexico.

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According to KRQE Significant changes are on the horizon for those buying or selling homes, as new rules will reshape how realtors operate. The National Association of Realtors (NAR) settlement agreement, resulting from a federal lawsuit, introduces new regulations aimed at altering realtor commissions. While some believe these changes could lower transaction costs, others worry that realtors might leave the industry.

Morgan Cannaday, President of the Greater Albuquerque Association of Realtors, expressed optimism about the settlement. “With any change, there’s always the sense of panic and uncertainty, but I truly feel the spirit of this settlement is a good thing,” Cannaday stated.

The settlement agreement brings two major modifications to real estate practices:

  1. Communication of Buyer Broker Compensation: Buyer broker compensation can no longer be communicated through the Multiple Listing Service (MLS). This change aims to promote transparency in how commissions are handled.
  2. Buyer Agreement Requirement: Before touring a home, buyers must now sign an agreement with their realtor. Cannaday emphasized that this agreement is intended to be consumer-friendly and focused on transparency, rather than locking buyers into a long-term contract.

These new rules will require buyers and sellers to negotiate fees upfront, which could present challenges for first-time home buyers. Those who have saved diligently for a down payment might find themselves at a disadvantage if sellers are unwilling to cover buyer broker compensation. This could either force buyers to seek different properties or navigate the buying process without professional representation.

The new regulations took effect locally on August 1 and will be implemented nationwide on August 17.

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