by Charles McShan








a building with columns and a clock on the front of it


Hello again. This is Charles McShan with Century 21 Universal. Here is part 2 of the blog post entitled —-The last post, we show how the verdict against the Nar came about and how it affects the home seller and buyers. We start this post by asking this question below.

Most legal verdicts are appealed. Why did NAR agree to this settlement?

This is a very good question. Verdicts of this magnitude with far-reaching implications are normally appealed, and it could take years for the case to reach the courtroom. So why did NAR settle this case so quickly? Here is the official statement of NAR President Kevin Sears on why they did not appeal this verdict.. click here

Once again, does NAR set real estate commissions nationwide?

No, they do not. People continue to believe what is posted on television and the news media. To respond, NAR has posted this response, which you can read by clicking this link here


The National Association of Realtors (NAR) changed the date that the new rules would take effect from late July to August 17th, 2024. Read the reasons for this date change by clicking the link here>>.click here

I heard I no longer have to pay the buyer’s agent fee. Is that true?

The judge in charge of this case has agreed in principle to the verdict and will put his signature to it later this year. So yes, it is true that i. Effective late July 2024, the new rule will be implemented nationwide. The Co-op agreement will then become a thing of the past. The court settlement says if the homesellers do not wish to pay the buyer’s agent commission, they no longer have to.  I will also illustrate it here for you Chicagoans in a way you can visually understand: Say you live on the South side of Chicago and must drive to O’Hare Field Airport to catch a plane. You will drive your car onto the Dan Ryan expressway (Interstate 90/94). Drive Northward onto the Kennedy Expressway and follow Interstate 90/190 into O’Hare Field. Straight forward, right? That is how real estate deals operated for decades. Straight forward, everyone knew the rules.

Effective late July of 2024, New rules will take place. Let’s return to the example of driving your car to catch a flight to the Ohare field from the south side. Like the above example, You drive your car onto the Dan Ryan expressway, but when you get downtown, there is a forced permanent detour. You can no longer use the Kennedy Expressway. You must detour onto the Eisenhower Expressway, go west, connect to the Tri-State toll road (1-294), and take that Northward into O’hare via the back door. That is now the new way. Both ways got you to O’Hare, but real estate agents/brokers are prohibited from using the Kennedy Expressway. The detour onto the Eisenhower Expressway is the only legal way to get to Ohare Field. The co-op agreement has been removed from the MLS, and you must detour around it. A common term everyone in the industry today uses is de-coupling. It has been separated or taken off the page. But in reality, it is the same game but with a different twist.

We all have heard the saying, it takes two to tangle. The same rule applies here. There will always be two sides to every real estate transaction. Remember, the question is the first post. What if you try to sell your home directly to the home buyer? I showed you a picture of two cooks at the same kitchen table.  While 2 cooks can prepare a meal together at the same table. A home seller and a homebuyer cannot get together like that. Why not?

The home seller and the homebuyer cannot sit at the kitchen table and talk like they are good friends. Here is a word that homebuyers must get to know and understand. It is the word Fiduciary. Have you ever heard the saying?”Nothing personal. It is just business.” The home seller will never tell you, the homebuyer, her deep personal thoughts about her home. The reality is the home seller has a house to sell. The buyer is looking for a home to purchase. Our job as real estate agents/brokers is to bring the client from both sides together to close a deal. We will talk more about the word Fiduciary later. These charts illustrate the old way versus the new way of doing things click here

A: I am a home seller. Why should I continue to want to pay the buyer’s agent fee? What’s in it for me?

With the co-op agreement eliminated from all documents, the decoupling or separation of commissions is now in effect. No one is cooperating anymore, but commissions are still here. The listing agent will still advise the home seller to offer compensation. Why? Because the home seller will be severely disadvantaged if they do not offer compensation in one way or another. Most homesellers will continue to offer compensation. They need to move and get on with their lives. They want to sell quickly because that is in their best interests.Homesellers who continue to offer compensation: This is how their homes will be, with other homesellers providing compensation. The buyer’s agent will notify their clients which homesellers are not offering compensation, allowing the homebuyer to decide if that particular home remains on their shopping list.

A: How will the agent find out if compensation will be offered?

How this compensation is delivered is another matter. Before the verdict, through the co-op agreement, the buyer’s agent knew their compensation rate upfront. Moving forward, you will have to do your due diligence. It will no longer be allowed on the MLS when the listing is created, but it will be offered, and the buyer’s agent will find it out. Then, conversations will be started. The subject might be addressed when an offer is made. Seller concessions could be found on the listing’s agent company website but not on the MLS.

B: What if the home buyer does not have enough money to pay the home buyer’s commission fee?

Some homebuyers barely have enough money to offer a down payment. If they also have to pay 100% of a commission fee, that will knock them out of the deal. Mortgage companies might try to roll the buyer’s payment into the mortgage loan. Many changes still need to be made. This is still a work in progress. Some local MLSs must change specific rules to comply with this verdict. Each conversation with each listing agent will be unique. This will be a learning curve for all of us, so stay tuned.

So yes, home seller, if you no longer wish to offer compensation to a buyer’s agent, you do not have to. A wise person once said to calculate the cost of doing business continuously. Offering compensation has been the way over 90% of homes have been sold for decades. Not paying the fee could put you at a disadvantage over other homesellers who will offer compensation because they want to move and get on with their lives. What about you? Do you need to relocate or downsize? Is the time of the essence? If you wish to see the benefits of offering compensation with the chart of the old ways of doing things compared with the new way, please click this link.

What other changes came out of this verdict?

Four significant rule changes emerged from this verdict, determining how a buyer’s agent will be compensated. They are as follows

1 The amount or the rate of compensation the buyer’s agent will receive or how this amount will be determined.

2:The amount or rate of compensation reflected must be objectively ascertainable and may not be open-ended.

3: The buyer broker may not receive compensation for broker services from any other source that exceeds the amount or rate agreed to in the agreement.

4: Buyer agreements must comply with state law. What is a buyer’s agreement? This brings up the next question.

What is a Buyer’s Agreement?

The homesellers represented by the lawyers were upset because they thought they were being forced to pay the buyer’s agent commission fee from the selling price of their home. That was never the case. The buyer’s agent fee comes from the listing agent taking a percentage of his/her agreed commission price to sell the house and giving that part to any buyer’s agent who brings a qualified buyer to the closing table. That is how deals have been getting done for over 100 years. But this verdict brought about changes.This verdict has just changed the way commission fees will be delivered. Another significant change is that homebuyers must sign an exclusive buyer-broker representation agreement. What is that, you may be asked? I have attached a copy of the Chicago Association of Realtors contract, which you can view by clicking this link. click here

Please download and print this document to familiarize yourself with this contract. This document has been around for quite a while. Each local association will have its local agreement contract. Every state could have different laws and interpretations. Each buyer’s agreement document must contain that state’s particular law. I only know the Chicago Association of Realtors document in this blog post. Get to know the document in your local area.  In over 12 states before this ruling, showing a home to a buyer without this signed document in the agent’s hand was illegal. Effective mid-August, it will be the rule in all fifty states.  If you once lived in Wisconsin and now live in Illinois, you are already familiar with this form of agreement.

 Please download and print out the document, and I will explain the main points of this document contract to you.

Line one is self-explanatory.

Line 2 is where you place the name of the sponsoring Broker, the company the agent works under, and the name of the homebuyer.

Line 7 identifies the personal name of the buyer’s agent who works under the sponsoring Broker.

Line 13 discusses the length of terms, generally around 30-60 days from the beginning to the termination date spelled out.

Lines 15-56 explain the duties of the buyer’s agent and the buyer, along with various disclaimers. 

Line 57 is very important. This is where the buyer’s agent places his /her commission fee, or, as it will be called from now on, his/her compensation fee. Most agents, myself included, charge a fee of 3%. It must be spelled out here to avoid any confusion.

Line 58  will be slashed out because we agreed to a percentage rate, not a flat fee.

Lines 59 -64 get into the specifics. Suppose the seller listing agrees to pay the buyer’s agent the full 3% commission, great. If they agree to pay a lesser price, the homebuyer must pay the difference to their buyer’s agent. That is self-explanatory. No one is working for free. We, too, have bills to pay. Other examples of how other forms of compensation might be payable are also addressed here.

Lines 65-72 rarely occur. If the buyer wants out, they are released from the contract.

Lines 81-89 deal with dual agency. Some homebuyers might say. I no longer need a buyer’s agent. I will contact the listing broker and work with them. We address that briefly in part one of this post when we talked about 2 cooks at the same table trying to prepare a meal. If the listing broker agrees, you two will sign line 105, creating the dual agency. Sounds good, right? Wrong! Here is where the term fiduciary relationship is used. That home seller signed a contract with a listing agent. That agent knows everything personal about that home and the home seller’s price options.

Have you ever seen Law and Order or Blue Bloods on television? The cops either detain you or lock you up, and if you are wise, you will say.”I want to talk to a lawyer.”They are automatically required to stop questioning you. Anything you tell your lawyer will be covered under attorney-client privilege. The same rules apply under the doctor-patient privilege. Personal information cannot be released without a court order. That same privilege applies to a home seller’s contract with their real estate listing agent. The real estate code of ethics prohibited you, the listing agent, from disclosing anything about that home seller’s property for the rest of your life.

Look at carefully stated words in lines 91 through 94. Honestly, provide, disclose, explain, and help. Those are words you say to a customer, not a client. I will discuss the terms customer versus client in the next section. Read lines 95-99 very carefully. It is so apparent that the listing agent cannot fully represent the home seller and the homebuyer simultaneously. Like you need a lawyer, you also need your real estate agent and attorney to look out for your interests. 

Lines 100-120 conclude the contract, which everyone signs, making it a legally binding document at lines 121 through 134. This agreement has three benefits

1:Alignment The Home buyer and the professional buyer’s agent are aligned or on the same page to find the client a home to purchase.

2: Compensation This agreement spells everything out. You will allow me to do ABC, and in return, you will pay me XYZ in the agreed compensation if the compensation does not come from the home seller.

3: Service  Do not let people waste your time. Real estate agents/brokers should never show homes without qualifying the client. You need to see a preapproval mortgage letter or a document showing cash funds in a bank. If the buyer did not perform this task beforehand, they must allow you to arrange an appointment with a loan specialist to preapprove them for a mortgage loan before you can show them any properties for sale on the market. There will be no exceptions to this rule.

Gone are the days when a person called and asked to see certain homes, and they either disappeared or played games with you, wasting your time. Now, everything will be done professionally. The home buyer must sign this agreement. The co-op agreement compensation once on the MLS is gone. It is now illegal. It is over! No one is cooperating anymore. The buyer’s agreement is a prenegotiated seller’s concession, and the homebuyer must come to terms with it. If the home seller offers 100% compensation, great. If they do not and you, the home buyer, have fallen in love with that home and want to purchase that home, then you will pay the difference to your home buyer’s agent. This is business. That is the new reality!

Will I, the homebuyer, need to sign a buyer’s agreement to visit an open house?

Good question. If you see an open house sign on a home for sale, you do not need a buyer’s agreement to inspect that home. This is because you have not spoken to anyone about buying a home. You are an unrepresented person who has not sought the services of a real estate agent. Quite honestly, you are fair game. The situation will change once you speak to a buyer’s agent and they agree to represent you. You will sign a buyer’s agreement. you can continue to visit open houses on your own if you wish. The difference is you now have the agreement, and if the listing agent asks you if you are working with a buyer’s agent, you will say Yes, I have a signed buyer’s agreement with my agent who represents my interests. This is for your protection. The listing agent always represents the seller first and foremost. Always get someone who will represent you first and foremost.

Suppose an agent tries to show a homebuyer a home without having this agreement.

Well, this is still preliminary. There is talk that if a buyer’s agent shows up with a client and the listing agent asks to see this agreement, if the buyer’s agent refuses, the listing agent could make a note of it and inform their local MLS where there might be some form of disciplinary actions taken in the form of either fines or suspension. Only a fool would risk fines or suspension for a selfish homebuyer who does not consider your interests. If this speculation becomes official. Do you think that the buyer will pay your fine? Time will tell, and I will let you know when something becomes official.

How will this verdict affect veterans looking to buy a home?

With the ruling that it is right now, a VA loan will not cover a realtor’s commission fee. How will veterans deal with this new situation? The powers that be are working on a remedy, so they will solve this problem between now and August. Our veterans have given a lot to this country, and they will be taken care of. So stay tuned.


 This blog post taught us that

1 The selling fee/Agent fee was coming off the MLS in July but has now been pushed back to August

2:The listing Agent can still pay the selling agent, but they cannot make the offer through the MLS.

3: You can use the seller’s concession for the selling fee, but you cannot say the concession fee can be used to pay the selling fee.

4: All homebuyers throughout the United States must sign a buyer’s agreement with a licensed Real Estate Professional before previewing homes for sale. This will become mandatory in mid-August 2024.

For those who might ask, do I need a buyer’s agreement before previewing a For sale by owner residence? The answer is no.

5: We also learned that the home seller no longer needs to pay the buyer’s agent commission, which raises a question. Business models that worked for so long that worked for so long are no longer relevant today.  Huge companies like Sears, K-Mart, and countless other businesses are no longer around. Should this be the time to say we are in the internet age and no longer need a buyer’s agent to close a real estate transaction? Is that true? Part three, the concluding part of this blog post, will answer that question.

                                                           Stay tuned! 

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                                                      Here is my Spring 2024 Homebuying guide click here


Are the days of a buyer’s agent a thing of the past?

Some might say yes, get rid of them. The real estate booms of the past are long gone. The coronavirus pandemic changed the world in many different ways. We are in a new era. A lot of agents have left the business. All are good comments, and everyone is entitled to their opinions. A lot of agents did not renew their licenses this year. That is their choice, but for those who chose to remain here in the trenches, I say continue to put up the good fight. We realtors wear many hats. Buyer agents are also listing agents. We help our clients find apartments to live in. We provide value to our clients and the industry. We wear many hats during the day.

Many assume we are a dime a dozen to be misused and lied to. People would call us up in the past, and we showed them some homes, but then they ghosted us. They will not return your calls, and you find out that they use their friend or relative in the industry to make an offer on the home you showed them. Many people view us as furniture or car salespersons. That is not the case, and in the third and final part of this blog post, I will show you the value we bring to our services. This court verdict has shown that buyer agents must display their skills more. 

Now more than ever, with interest rates still high and a housing shortage still around, the present home buyer must have or be in the final stages of getting a preapproved home loan or have that preapproval letter when they go to their agent to help them find a home. You must know what type of home you can afford.

What do I bring to the table as a Real Estate Agent?

What are the needs, the wants, and the features you want your home to have, and if you can’t have them all, what are the needs or wants you cannot live without? This is the job of a real estate agent/broker. To get you down that road. In my case, you are on my blog post site charlesmcshan.com. Feel free to read many of my past posts. I talk equally on subjects that pertain to both the home seller and the home buyer. Please look for the four-part series entitled The Steps in the Home Buying Process. Take time to read each post carefully for good tips. Also included is the blog post on what real estate agents do for their clients. If you wish to read that post, please click this link here.

I am not trying to overwhelm you, but here are over 170 things we do for home buyers and homesellers. If you are interested>>

Real estate agents /brokers are not a thing of the past. Our clients need our services more than ever now.

As real estate agents are constantly being trained., I have acquired four certifications to be a better service to my clients. They are 

1:Short Sales and Foreclosures (SFR) for short.

2 Certified Distressed Property Expert (CDPE).

Both certifications qualify me to help people navigate the foreclosure process. Making a short sale before the foreclosure will help clients get on with their lives and avoid a significant hit on their credit records.

The ones that apply to the homebuying clients are

3: I am an Accredited  Power Agent specialist working under Daryl Davis. His company has trained me intensely. The Power Agent logo is copywritten. Much of the literature I used in this blog post originated from his site. This post’s language is mainly legal and can be tedious. But the graphics are self-explanatory, and you get a lot from them.

4: I am an Accredited Buyer’s Representative (ABR) for short. This is a National Association of Realtors designation for real estate agents who focus on working directly with buyer-clients at every stage of the homebuying process.


What is an ABR Specialist?

Good question. This designation qualifies me to help home buyers achieve their quest for homeownership. Please review the question/answer format here to learn more about this unique training. You will learn more about the word Fiduciary here.

Please see the link to see what I do as your Power Agent. Included are my Power Agent credentials; there is a chart on the difference between a customer and a client, and there is that word Fiduciary again. Next is a chart that details the 40 top things I will do to earn my fee, and this section concludes by honestly telling you again that Iif I am the listing agent, my Fiduciary duties to the home seller will prevent me from releasing sensitive details to you about the home so please do not ask. Please click this link>>

What is a Power Agent?

I am part of the Power Agent under the leadership of Real Estate Guru and author Daryl Davis. This section includes my certification as a Power Agent under copyright protection. 90% of the graphs and Charts in this series of posts come from my membership with this company. Like the above section detailing what I bring as an ABR Specialist, this section also highlights my value to my clients. For example, a chart explains the difference between a customer and a client. You need to know the difference between those two words. Next is a chart that details the 40 top things I will do as your exclusive buyer’s agent. This section concludes by honestly telling you again that if I am a Listing agent, my Fiduciary duties to the home seller will prevent me from releasing sensitive details to you about the home, so never say you will go to the listing agent to get a good deal. Each side must be represented legally and by their real estate agents. Click the link here for the charts.

Aren’t Real Estate agents only salespersons?

Many think so, but we are not. Salespeople are just salespeople. They sell things, and there are no attachments. Real estate agents/brokers are highly trained professionals with attachments, which are, once again, Fiduciary. We have Fiduciary responsibilities to our clients; a salesperson does not. This section explains how we work not independently but under a managing broker. The definition of a Fiduciary is described in detail here, along with the difference between a salesperson and a person who is committed to the client and has a legal obligation to represent the client’s best interest. Click here for the charts that prove this point>.

As you can see, only four job groups qualify for Fiduciary responsibilities. You heard the term doctor/patient privilege or attorney/client/privilege. You have seen too many TV shows or movies not to know about that term. Well, it also applies to real estate. We have the same privilege. It is against the law to\ impersonate a lawyer, police officer, and doctor. Impersonating a real estate professional is also a crime, so we are not salespeople. By now, you should be sick of the word Fiduciary, but you should understand that we are not a dime a dozen as many people think. When the coronavirus pandemic had millions staying home from work, Illinois State Governor J.B. Pritzker said real estate agents/brokers were essential workers and vital to the economy. They had to put on their face masks and go to work.

Yes, Real Estate Agents/Brokers are Professionals.

We are just that, highly trained forever being trained professionals. We are here to stay. Rules do change, but we adapt to the rules; we have been this for over 150 years. I was not privy to why NAR settled and did not fight. Maybe they wanted to avoid bankruptcy. So they pivoted. If Sears Robuck and company, along with K-mart, pivoted and adjusted to the new kids on the block, namely Amazon, Wal-Mart, and Costco, they might still be around, but they didn’t adapt and they no longer exist.

The internet has eliminated many big box stores. Uber and Lyft came out of nowhere, almost bringing taxi cabs, limousines, and rental car companies to their knees. After the coronavirus pandemic, the limos and rental car companies rebounded, but the taxicab industry could not. Most of their former riders remain with Uber and Lyft and will not return to riding in taxis unless Uber and Lyft go out of business.

What do we learn by reading this blog post?

What’s the point? Times have changed, and businesses have had to either change with the times or disappear. The real estate industry has had to adapt to the new reality or face bankruptcy. Regarding this settlement verdict, we have learned certain things in this blog post

1:There was never a fixed 6% commission fee imposed on the masses by the National Association of Realtors, local MLS, or Corporate or Independently owned and operated real estate franchises.

2: Real estate commission fees have always been negotiated with each home seller and buyer.

3:The results of this verdict will not bring the prices of homes downward.

4: Out of this verdict, all MLS services, Member boards, and others must remove all requirements of Co-op compensation agreements from all of their documents, but offers of compensation can be mentioned elsewhere but not on the MLS.

5: All homebuyers must now sign an Exclusive Buyer- Broker Representation Agreement. There will be no exceptions to this rule.

There it is. The new way of buying and selling in Amercia. What else has changed? Nothing! It still takes two to tangle. Homeowners want to sell, and people are looking to buy. There have been three agreements.

1:  The agreement between the home seller and the listing agent.

2:Now, there is a mandated agreement between a home buyer and their agent.

3: Not many people think about this agreement, but it is part of the real estate contract. The purchase agreement is governed by the Title or Escrow companies, which involve the attorneys, the title company employees, and all other neutral parties, including the real estate closing contract.


Real estate agents/brokers will continue bringing the home sellers and homebuyers together. We do more for our clients then what they do in Great Btian ,Germany Austrlia and the world over combined. No country anywhere equal what we real estate agents/ broker do for our clients here in AmerciaThe Real Estate Industry started in Amercia in the 1800s. Despite trials and tribulations, it will continue to exist as an industry. Companies are trying to make inroads into our sector through cut-rate pricing and other means, but we continue to strive. A low inventory of homes for sale, high interest rates, and escalating home prices are all challenges we professional realtors/brokers must deal with.

The buying and selling properties, both residential and commercial, contribute to the economy of the United States. Realtors are essential workers who helped this country continue operating during the past coronavirus pandemic. We are not salespersons, as the last groups of slides will show, but are licensed professionals continually upgrading our skills to meet the new demands. My office is located at 7300 N. Western Ave in the West Ridge neighborhood of Chicago. Like Superman wears an S on his chest, Realtors have their emblems, as the last group of slides will reveal. Dispite any legal verdicts we realtors will survive and we will be here for you when you need us. Thank you for reading this 3 part blog post and please it with others. I welcome all comments.We will always be here for you because we are Realtor Strong! click here

                                                                               Take care

                                                                             Charles McShan   

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