Market Insight

NAR Settlement: Impact on US Realtors and Opportunity for Canadians in Pre-Construction

March 26, 2024

3

min

Author

Terence Fahey

Author

Have you heard the rumbling in the real estate world?

The recent NAR settlement in the US is shaking things up for our American colleagues. This settlement focuses on transparency and could potentially change commission structures for resale properties. Here in Canada, similar discussions are simmering around the Canadian Real Estate Association (CREA). While the final outcome remains to be seen, one thing is crystal clear: Canadian realtors who can adapt to this evolving landscape will be the ones celebrating success.

Understanding the US NAR Settlement and its Potential Impact

The NAR settlement aims to bring more clarity and fairness to real estate transactions, particularly regarding buyer agent compensation. Previously, seller agents in the US would often list the commission offered to buyer agents on a platform called the MLS (Multiple Listing Service). This practice is now a thing of the past. The settlement now mandates separate negotiations between realtors and buyer's agents for their compensation. This could lead to more competition among realtors and potentially lower commissions for resale properties down the road.

Why Pre-Construction Sales Offer a Strategic Advantage for Canadian Realtors

While Canada hasn't yet reached a formal settlement mirroring the US situation, the winds of change are definitely blowing. This suggests a potential shift towards a more competitive resale market, with commission structures possibly being impacted. But fear not, Canadian realtors! Pre-construction sales offer a fantastic alternative with significant advantages:

  • Double the Commission Power: Developers typically offer commissions of 4-6% on pre-construction sales, compared to the standard rate for resales. This translates to nearly double the earning potential for realtors who embrace pre-construction sales.
  • A Less Impacted Market Space: Pre-construction sales in Canada operate in a bit of a grey area, with current regulations having a less direct impact. Since you're working directly with builders rather than navigating the traditional buyer-seller dynamic, buyer agent compensation disclosure doesn't necessarily apply in the same way.
  • Helping Solve the Housing Crunch and Meeting Market Demands: Canada's housing shortage is driving a surge in pre-construction projects, creating a vital pipeline of new homes to meet the growing demand. By expanding your services to pre-construction sales, you position yourself at the forefront of this market shift. You'll attract both investors seeking fresh opportunities in a growing market and first-time homebuyers eager for brand-new builds with modern features.

Embrace the Future and Secure Your Success with Pre-Construction Sales

While the US grapples with the NAR settlement, Canadian realtors have a golden opportunity to leverage the pre-construction market and secure their future success. By embracing pre-construction sales, you'll be setting yourself up to thrive in this dynamic and growing sector.

Buildify, the "MLS for pre-construction homes," is here to empower you and your fellow agents with the tools and expertise you need to excel. We offer a comprehensive database of pre-construction projects, powerful tools to streamline your workflow, and the knowledge of industry experts to guide you every step of the way. Don't miss out on this exciting opportunity – contact Buildify today and unlock the full potential of pre-construction sales!

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