The aftermath of a national class action brought by sellers of homes has a result that’s playing out in Fort Dodge.

The National Association of Realtors (NAR) agreed to make some policy changes in order to settle the lawsuit.

That trade group changed rules as of August so that brokers who list a home for sale on any of the databases affiliated with the NAR are no longer allowed to include offers of compensation for a buyer’s agent.

That move was a way to address a key assertion in the lawsuits brought against the NAR and other notable real estate brokerages, which was that homeowners are forced to pay artificially inflated agent commissions when they sell their home.

The key change centers on who pays the bill for real estate agents who represent home buyers. As a result, buyers can no longer assume that a seller will cover the cost of their agent’s commission.

Keenan Schuur is the president of the Fort Dodge Board of Realtors.

Schurr said it has long been important to Fort Dodge Realtors that buyers and sellers understand the many steps of buying or selling a house, including costs that they may have to pay. That’s because buying or selling a home is the largest financial transaction most people will undertake in their lives.

“A lot of buyers don’t understand the intricacies in a transaction and what costs are involved,” Schurr said. “Having discussions early and often with their Realtor and lender, no matter what point of the transaction they are in, is very important to understand the process.”

Until the new rules, an agent or broker representing a home seller typically split the commission – often around 5 to 6 percent of the home’s sale price – with the agent working on behalf of the homebuyer. Such an arrangement is known as cooperative compensation.

Schuur said the use of cooperative compensation had been “very common and used in the majority of cases (in Fort Dodge). However, it was always negotiable and clearly outlined in our documents.”

Now after the NAR settlement, a broker who represents a seller would no longer be allowed to include a blanket offer of cooperative compensation to a prospective buyer’s agent when they advertise the property on NAR-affiliated Multiple Listings Services. The MLS is where the majority of U.S. homes are listed for sale.

That change aims to remove any incentive from a buyer’s agent to steer their client away from home listings that don’t include a cooperative compensation offer.

Schurr said he neither agrees or disagrees with the change.

“We are still learning and adapting, and as long as we keep the clients’ best interest in mind, that is what is most important,” he said.

“Additional disclosure and discussions with buyers are definitely a plus,” he added. ” The one facet that makes things more complicated is that a buyer cannot view a home without a buyer representation agreement with the Realtor they choose.”

Schurr noted there is a new Iowa law that took effect on July 1 concerning buyers’ representation, called the Real Estate Transparency Act. He said the state law says a buyer can’t look at a property without a Buyer’s Representation Agreement in place, which will remove calling an agent on a whim and seeing a house on short notice.

“It basically states our obligations to a buyer, the buyer’s obligation to us, the retaining period, the type of property that buyer is looking for and clearly maps out the ways compensation is handled,” he said. “The terms will vary and it is all negotiable.”

He said Fort Dodge Realtors before and after the changes continue to have top flight service top of mind.

“Our area has done a good job of disclosing and explaining the compensation model,” he said. “Our documents clearly outline how it works, and with our new documents, it goes into even more detail. This is why we have stressed having consultations and open and honest discussions regularly with clients.”

Several other Fort Dodge Realtors referred Messenger interview requests to Schuur, who is with Coldwell Banker Associated Realtors.