LOTSAR 2024 President Nick Hinton addresses recent headlines in the media about the National Association of REALTORS® (“NAR”) agreement to settle lawsuits regarding the compensation structure in real estate transactions.
Nick’s letter to LOTSAR Membership –
As the 2024 president of the Land of the Sky Association of REALTORS® (“LOTSAR”), I am writing to address recent headlines in the media about the National Association of REALTORS® (“NAR”) agreement to settle lawsuits regarding the compensation structure in real estate transactions.
These headlines and stories paint a false narrative, suggesting that there are standard compensation rates nationwide, and stating that REALTORS® have agreed to “slash commissions” to settle these lawsuits.
Compensation for representation in real estate transactions is, and always has been, completely negotiable and there is not a standard rate. Broker compensation has always been decided between a real estate firm and its client, and that practice is not changing, either at the national or local level.
I would also like to emphasize that North Carolina has had rules and practices in place for years that require disclosure of how representation in real estate transactions work, including language that clearly outlines how compensation works. Buyers and sellers complete agency agreements that specifically state the plan for agent compensation, which again is and always has been completely negotiable. The NAR settlement (once approved) will be implementing similar agreements on the national level as a requirement for all REALTORS®, but we here in North Carolina are ahead of the curve in this regard. The NC Real Estate Commission has prioritized arming consumers and clients with clear information regarding real estate related services and compensation.
NAR is America’s largest trade association, representing more than 1.5 million members involved in all aspects of the residential and commercial real estate industries. REALTORS® are real estate professionals who have chosen to join NAR.
What does this mean to you? It means that any REALTOR® with whom you work has voluntarily agreed to abide by a national Code of Ethics, adopted in 1913, based on honesty, transparency, professionalism, and protection of the public as part of their fiduciary duty to buyers and sellers. REALTORS® are required by law to adhere to fair housing practices that ensure every buyer or seller is protected from discrimination based on race, color, sex, national origin, religion, disability, or familial status. They are also prohibited from engaging in discriminatory speech or conduct outside their real estate practices.
Our local Board of REALTORS®, LOTSAR (which was founded in 1917 and represents over 2,000 REALTOR® members in Buncombe, Madison and Transylvania counties), further requires that its members complete yearly continuing education courses and stay informed about the local real estate market and issues of concern in our area (affordable housing, short-term rentals, changes to legislation that affect real estate transactions or housing policies, etc.).
These same news stories also sometimes question the value of a REALTOR® in a real estate transaction. REALTORS® have offered, and will continue to offer, valuable services in exchange for compensation. They are professionals who work tirelessly in advocating on behalf of their clients to ensure they get the best possible deal in the transaction.
The specific services REALTORS® provide are numerous, far too many to list in a single article. They help people build wealth, protect and inform consumers, lead in our communities as entrepreneurs, and contribute to the local economy. Most importantly, they help buyers and sellers navigate the complex financial and legal aspects of buying or selling a home, a time-consuming and multi-step process that requires a depth of knowledge and extensive training. Learn more about the value a licensed REALTOR® brings to the table by visiting the NAR’s Competition.realtor landing page.
My sincere hope is that anyone who has seen these misleading and inaccurate stories in the media will seek out their favorite REALTOR® and ask them about the value they bring to a real estate transaction. Buying or selling a home is one of the most consequential transactions one will ever take part in. Having a trusted REALTOR® help navigate the process ensures that the consumer’s best interests are represented.
Thank you.
Nick Hinton, 2024 President
Land of the Sky Association of REALTORS®
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