The Impact of the NAR Settlement for Renters

As the real estate industry implements the required changes resulting from the National Association of Realtors (NAR) settlement, the focus has been on buyers. The real estate community is fueled by buyers and sellers though the corporate relocation industry is fueled by sellers, buyers, and renters. With over 60% of corporate transferees renting, the NAR settlement means changes for agents representing renters (tenants). What will change?

• Agents who use the MLS for sourcing rental options will have tenants sign a showing form
• The form stipulates the fees associated with the agent representing the tenant.
• Because PorchLight is paying the agent/brokerage a tour fee, that is stated and there is no additional cost to the renter except in broker fee markets like NJ, NY, and Boston.

• Based on NAR Settlement FAQS #74, if the chosen rental pays a commission to the agent, the agent will have the tenant sign an amended agreement allowing for the agent to receive the commission as additional compensation.
As with every service experience, proper communication and expectation setting is key. Having this conversation with transferees, prior to the service experience, will arm them with the knowledge needed as they seek their new lease. One of the goals of the lawsuit was to have more transparency in the home listing and buying commission process. An unforeseen benefit is the transparency that renters will now experience when their relocation package allows for them to be properly represented in their rental search.
As a result of the NAR settlement, what should employers consider in their relocation policy support for renters?
• If employers want their renters (tenants) represented in the leasing process, the representing agent will need compensation for that representation.
• If the renter doesn’t receive a rental finding benefit within policy, they aren’t counseled on what to expect with the rental finding process and tenant agreement.
• If the relocation benefit covers a rental tour, the fee paid by the employer compensates the agent and there wouldn’t be additional fees required of the tenant (with the exception of broker fee markets NY, NJ, MA).

• For approximately $1000, employers can guarantee proper representation for their renters and know they will receive valuable local insights, rental expertise, and risk mitigation from unfavorable leasing terms.

For more information or questions about the impact of the NAR settlement on renters, please contact diane@porchlightrental.com