NAR Settlement Updates
On March 15, 2024, the National Association of REALTORS® announced it entered into a nationwide settlement covering the commissions lawsuits brought by sellers in many states across the country. This settlement includes the state and local associations and REALTOR®-owned MLSs (like HAR). Note that the settlement has been preliminarily approved, but final approval by the court is not be expected until late 2024.
We know many people have questions about the proposed rule changes. HAR is working to get you answers. HAR strives to be transparent and will update you as we learn new information.
Frequently Asked Questions
Practice Changes
Q: How does the NAR settlement impact HAR members/MLS subscribers?
Q: When do the rule changes take effect?
Q: Do I have to be a member of NAR?
Q: Will this settlement impact my dues?
Q: Will the policy changes impact any of the current forms being used?
Offers of Compensation
Q: Are commissions still negotiable?
Q: Can offers of compensation be conveyed through channels other than the MLS?
Q: Can offers of compensation be displayed in ShowingSmart?
Q: Can the commission information be put in the agent notes/remarks?
Q: Can agents put a note in Agent Remarks directing agents to a website that will display the compensation for that particular listing?
Q: Can I add an attachment explaining compensation in the agent attachments section?
Q: Can offers of compensation be displayed on an attachment with offer instructions?
Q: Can we add a field in the MLS that asks agents to enter how much the seller paid the buyer’s agent after the transaction closes?
Q: How will buyer brokers get paid now?
A: The types of compensation available for buyer brokers would continue to take multiple forms, depending on broker-consumer negotiations, including but not limited to:-Fixed-fee commission paid directly by consumers
-Concession from the seller
-Portion of the listing broker’s compensation
Q: Can buyers and buyer brokers rely on an offer of compensation that was on the MLS prior to the effective date of the MLS policy changes?
A: If the sales contract is signed before the MLS policy change, the buyer broker should be able to rely upon the offer of compensation even if closing occurs after the date of the policy change. But if the sales contract is not signed before the date the participant’s MLS implements the policy changes, the offer on the MLS will not be valid and buyers and buyer brokers may wish to protect themselves in writing with the listing broker or seller through a broker agreement or by including the offer of compensation in the sales contract.
Q: Does Standard of Practice 16-16 prohibit the negotiation of buyer broker compensation in a buyer’s purchase offer?
A: No. A buyer can always ask their buyer broker to make it a term of an offer to purchase that the seller pay certain compensation to the buyer broker.
Standard of Practice 16-16 prohibits a REALTOR® from attempting to modify the terms of a listing agreement through the terms of an offer because the listing agreement is a contractual matter between the seller and the listing broker. However, the seller and the listing broker may independently choose to amend the listing agreement or take any other action they deem appropriate based on the seller’s negotiations with the buyer. Standard of Practice 16-16 also prohibits a REALTOR® from delaying or withholding delivery of a buyer’s offer while attempting to negotiate a buyer broker compensation.
Q: How will buyer brokers get paid now?
A: The types of compensation available for buyer brokers would continue to take multiple forms, depending on broker-consumer negotiations, including but not limited to:-Fixed-fee commission paid directly by consumers
-Concession from the seller
-Portion of the listing broker’s compensation
Q: What should listing brokers advise their clients about the prohibition of offers of compensation on an MLS?
Q: Can a buyer request the listing broker to pay compensation to the buyer broker?
Q: Can IDX-fed websites have offers of compensation?
Q: Can bonuses to agents be communicated in the MLS?
Written Agreements
Q: Is a Buyer Representation Agreement enforceable?
Q: Who will be responsible for enforcing the written agreements and ensuring all parties follow this new practice change?
Q: Will open houses be considered the first showing for unrepresented buyers and therefore require a signed Buyer Representation Agreement?
Q: Can a listing agent show their listing without a Buyer Representation Agreement?
Q: Are renters required to sign a Buyer/Tenant Representation Agreement before touring a rental property?
Q: Does the requirement to use a written agreement before showings apply to commercial transactions?
Q: What does it mean to tour a home?
Q: Does the requirement for a written agreement with buyers mean that MLS participants and buyers must enter into a written agency agreement?
Q: If an MLS participant hosts an open house or provides access to a property, on behalf of the seller only, to an unrepresented buyer, will they be required to enter into a written agreement with those buyers touring the home?
Q: Are written buyer agreements required when listing agents talk with a buyer on behalf of a seller only or as subagents of the seller?
Q: Are written buyer agreements required in a dual agency scenario, when a single agent works both for the seller and for the buyer?
Q: Are written buyer agreements required in a designated agency scenario, when a single broker works both for the seller and for the buyer, and designates an agent to represent the buyer?
Q: Should active buyer agreements entered into before the MLS policy change be amended to make sure any compensation is not open-ended and is objectively ascertainable?
Q: Should active listing or buyer agreements entered into before the MLS policy change be amended to include a conspicuous disclosure that compensation is not set by law and is fully negotiable?
Q: Can buyers and buyer brokers rely on an offer of compensation that was on the MLS prior to the effective date of the MLS policy changes?
Q: Does the requirement to use a written agreement before showings apply to commercial transactions?
A: No. The settlement and the practice changes it requires are focused on
residential transactions, not commercial transactions or leases.
Q: Will listing agreements be shared with buyer’s agents and vice versa?
A: This is not needed under the terms of the settlement.
Financing
Q: How will this impact VA loans since they do not allow the buyer to pay commissions?
Q: Does the settlement change access to mortgages for buyers?
Q: Can real estate commissions be financed?
Other
Q: How does this settlement impact home buyers and sellers?
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-MLS participants working on behalf of buyers would be required to enter into written agreements with their buyers before touring a home. These agreements can help consumers understand exactly what services and value will be provided, and for how much.
Q: How does the settlement impact agents when handling rental properties?
Q: Will the policy changes impact existing listings or homes already under contract?
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-MLS participants working on behalf of buyers would be required to enter into written agreements with their buyers before touring a home. These agreements can help consumers understand exactly what services and value will be provided, and for how much.
Q: Does the settlement change the MLS rules for off market sales or pocket listings?
Q: How does the settlement impact intermediary?
A: Intermediary may be a practice that becomes more popular for a listing agent confronted with an unrepresented buyer who might accept the intermediary relationship for the one property transaction.
Q: Will the settlement change anything about how commercial real estate is practiced?
Q: Will HAR offer training/classes about the policy changes?
Q: How does the DOJ investigation impact the proposed settlement?
Q: Where can I find more information about the NAR settlement?
Last updated April 27, 2024
Legal Updates from HAR
We have shared all of the information that we can provide, as soon as we could provide it, in the following emails:
October 16, 2023 | Update on NAR Lawsuit
October 31, 2023 | Update on Buyer Agent Commissions Lawsuit
December 15, 2023 | Second Texas Commissions Lawsuit Filed
January 11, 2024 | Legal Update from HAR
February 2, 2024 | Insights from HAR President & CEO Bob Hale
March 15, 2024 | Important Lawsuit Update
Resources
National Association of REALTORS®
The following information has been provided by NAR and does not necessarily reflect the views or legal positions of HAR or HRIS (MLS).
Find the latest information about the proposed settlement on NAR’s website HERE.
Texas REALTORS®
The following information has been provided by TR and does not necessarily reflect the views or legal positions of HAR or HRIS (MLS).
Access information about compensation and the settlement on the Texas REALTORS® website HERE.