Not to belabor the point, but the $418 million settlement by the National Association Realtors, followed by the $57 million settlement with Compass, has virtually all of the media filing various reports, most of which are confused and confusing.

In many real estate transactions, especially those that are with Realtors who use Multiple Listing Services, there is a compensation number offered on the MLS for the buyers’ agents. Often, when the sellers see that they paid the buyers’ agents to work as a designated agent for the buyer, many times in very adversarial roles, these buyers are irked.

As a matter of fact, there are a number of other people that have become irked by this practice and some of them wear robes.

Others that are irked receive their compensation from the Department of Justice. In an effort to make the country more just, a practice they are prone to do, they have decided to make the process of buying and selling homes more just.

One thing for all to remember, the NAR has agreed to mandate a few things, something they rarely do outside the Code of Ethics. The organization has never set a standard fee or commission, but in defense of sellers, they have been told that the NAR has by none other than some of its uninformed, untrained members.

Here are the changes going forward:

Buyers must enter into an agreement with a buyers’ broker if they are so inclined. NAR could care less if the buyers do not wish to affiliate with a Realtor in that role. In that agreement, the compensation for the Realtor will be set at whatever compensation both sides feel is just. The instrument is a binding, legal document. Like any contract, it may be amended after it is executed.

There will be no compensation listed on the Multiple Listing Service, although sellers are free to pay whomever they want whatever they want, but the listing broker is not allowed to advertise that on any listing that is part of an IDX (Internet Data Exchange) feed.

A Realtor with four listings could advertise his or her four listings and state that for those four listings, and those four listings alone, the seller will compensate the buyer’s agent.

In commercial transactions, the listing agent will often receive a smaller fee than the agent who brings the buyer because the property owners and the listings agents realize the importance of the person with the money. In Nashville, hardly any commercial agents are Realtors, so they have not been under scrutiny.

There are some 90-plus companies that are not part of the NAR settlement, and they must cut their own deals. It has been suggested that the new settlement and its repercussions will lower prices and therefore help buyers. The feeling is that sellers will save money by not paying buyers’ agents.

Let’s take a trip to a fictitious living room for a listing proposal. The characters are the seller and the Realtor. I shall assign names that are not real.

John, the seller, has invited Sue, the Realtor, to list the house. Sue says that based on comparable sales through the MLS – the organization that is funded by Realtors and provides Zillow, Trulia, Realtor.com and the rest with their data and photos – John’s house is worth $500,000.

John read somewhere – could have been almost anywhere – that buyers’ agents used to get 3% commission. He feels that is not fair and he should not pay it.

Sue responds that he is not required to pay the buyers’ agent if he does not want to do so, the same answer she has given for 30 years. They agree that the buyers’ agent will not receive any fee from the seller.

So, Sue says, that means you only want to list your house for $485,000 since you are not paying that 3%? The buyer says “Why would I do that? You just told me it is worth $500,000. I want to list for $500,000.”

Apologies to all who think this is going to make houses more affordable or that Realtors have driven the house process upward. The United States remains part of a free-market economy, with supply, demand and the availability of money driving the prices. Sellers will take what they can get, and why shouldn’t they?

Sale of the Week

Ho-hum, another $4 million sale.

935 Battery Lane

In 2017, there were three in Davidson County, with that number jumping to eighth in 2018 and climbing to 22 in 2019. In 2020, when the city closed for COVID, there were 17 houses that sold for more than $4 million.

The realty dam broke in 2021, and the number of single-family residential properties that sold for $4 million or more exploded to 33. That number soared to 51 sales in 2022.

The sellers of those houses should not have cared if they paid an extra dollar or two per gallon for gas, which they did not that year.

In 2023, things slowed, but not in the $4 million-plus range, where 58 homes changed hands.

As of this writing, there have been 12 closed sales of $4 million or more in 2024 with 41 on the market and seven under contract. If those seven alone close this month, that would be 19 in the first third of the year. If that pace continues, Davidson would have 57 $4 million-plus sales for the year.

Sydney Salati, a Parks agent, listed the house, and the buyer was unrepresented on a house that went under contract March 15.

This house was listed for $4.49 million, and the buyer purchased the property for $4.3 million.

This one is a doozy, with 8,130 square feet that Sydney Salati describes as “a main house with six bedrooms, five full bathrooms, two half bathrooms, two offices, bonus and theater rooms, and a wine cellar.”

Additionally, there is a pool and the requisite pool house with sauna, hot tub and fire pit, all on a one-acre lot. The sale closed within two weeks of contract acceptance, and that will save buyers and sellers more money.

Richard Courtney is a licensed real estate broker with Fridrich& Clark Realty, LLC and can be reached at [email protected].