What You Need to Know

A: The MLS will be responsible for enforcing the rule regarding written agreements, similar to how the MLS enforces other existing rules. If a violation is reported of the requirement of having a signed, written agreement in place prior to a showing, the Buyer’s Agent will be asked to provide a copy of the agreement with a date prior to the date of the showing. If it is determined that a signed, written agreement was not in place as required, there will be an automatic fine for $500 issued. If an issued fine is not paid, an MLS subscriber would have their MLS access suspended. Any agent scheduling a showing through ShowingSmart will be asked if they have a signed, written agreement in place at the time of scheduling the showing—or if they represent they will have one in place prior to the actual showing taking place. This will be asked whether scheduling online or on the phone.

A: No. We do not believe that an unrepresented buyer at an Open House invokes the requirement of having a Buyer Representation Agreement in place.

A: The Listing Agent may show a listing to an unrepresented buyer since they would not be seeking services from that Listing Agent who is already obligated to represent the interests of the seller.

A: The settlement only deals with properties for sale on this issue of buyer representation, and it does not address rentals or change anything about needing a written agreement prior to showing a rental property. It would still be a smart idea to have a conversation with the client about how the agent will be compensated and have the Buyer/Tenant Representation Agreement signed.

A: No. The settlement and the practice changes it requires are focused on residential transactions, not commercial transactions or leases.

A: Written buyer agreements are required before a buyer tours a home for sale listed on the MLS. Touring a home means when the buyer and/or the MLS participant, or other agent, at the direction of the MLS participant working with the buyer, enter(s) the house. This includes when the MLS participant or other agent, at the direction of the MLS participant, working with the buyer enters the home to provide a live, virtual tour to a buyer not physically present.

A: No. MLS participants and buyers will still be able to enter into any type of professional relationship permitted by state law. NAR policy does not dictate: what type of relationship the professional has with the potential buyer (e.g., agency, non-agency, subagency, transactional, customer), the term of the agreement (e.g., one day, one month, one house, one zip code), the services to be provided (e.g., ministerial acts, a certain number of showings, negotiations, presenting offers) or the compensation charged (e.g., $0, X flat fee, X percent, X hourly rate).

A: No. The new rule will cover every type of relationship where an MLS participant is working with a buyer.

A: No. If the MLS participant is working only as an agent or subagent of the seller, then the participant is not working for the buyer. In that scenario, an agreement is not required because the participant is performing work for the seller and not the buyer.

A: Yes. If an MLS participant is working as an agent for a buyer, a written agreement is required.

A: A written agreement is needed in order to show someone a property.

A: Yes. If an MLS participant is working as an agent for a buyer, a written agreement is required.

A: Yes. MLS participants working with a buyer after the effective date of the policy should take steps to ensure that the buyer has agreed to the necessary terms required by the settlement agreement.

A: MLS participants must make this disclosure, but active agreements do not need to be amended to accomplish this. MLS participants can do a separate disclosure to satisfy the requirement.

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.

A: It depends on what is contained in that agreement, but you should only need one per client, unless you have listed specific addresses that the agreement would cover.

A: This is not needed under the terms of the settlement.

A: Yes. It is a contract, so it is enforceable.

Yes. Compensation is currently negotiable and will continue to be negotiable. Compensation should always be negotiated between agents and the consumers they serve.

A: Yes. Offers of compensation can continue to be an option consumers can pursue off-MLS through negotiation and consultation with real estate professionals. According to NAR, listing brokers could display an offer of compensation to a buyer agent on their own website or on social media. However, sellers can still offer buyer concessions (i.e. buyer closing costs) on the MLS.

A: No, offers of compensation cannot be displayed in ShowingSmart or any other showing service that receives listings from HAR.

A: No. Under the settlement, offers of compensation cannot be communicated through the MLS.  This includes attachments and all comments. Any mention of compensation in the MLS (which has been against the rules for years outside of the compensation fields) will be an automatic fine of $500 and the violating language will be immediately removed from the listing. If there are three violations with a 12-month period, the fine will be doubled for the third and subsequent violations.

A: No, however, there is a link to your company website displayed on the Matrix detail page.

A: No. That would not be allowed as that is still an offer of compensation being made through the MLS.

A: No, not in Matrix.

A: This would still relate to compensation, so we cannot add this field.

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

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.

A: Listing brokers should inform their clients that offers of compensation would no longer be an option on an MLS. This change will not prevent offers of cooperative compensation off an MLS. And it will not prevent sellers from offering buyer concessions on an MLS (for example – concessions for buyer closing costs). Compensation would continue to be negotiable and should always be negotiated between agents and the consumers they serve.

A: Offers of compensation could continue to be an option consumers can pursue off-MLS through negotiation and consultation with real estate professionals.

A: A broker may display offers of compensation for their listings only on their brokerage website. Offers of compensation will not be available in MLS provided data feeds.

A: No, bonuses are considered compensation and cannot be expressed in the MLS based on the terms of this settlement.

A: If the sales contract is signed before August 17th, 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 August 17th 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 commission agreement or by including the offer of compensation in the sales contract.

A: No, there will not as there never has been a field for that in the MLS. There will still be a fields to show repairs paid and closing costs paid by Seller. We will be monitoring this situation as it evolves and consider changes as issues arise.

A: All mentions of compensation, either current offers or those from closed transactions, have been removed from the MLS as of August 16, 2024.

A: Any dollar amount the Seller wants to indicate they may be willing to contribute toward Buyer expenses.

A: No. The amount is an indication of the willingness of the Seller to offer something toward the Buyer expenses. Any amount would need to be negotiated as part of the final contract.

A: The Buyer has the sole discretion of how any contribution toward their expenses would be used.  They may use it for repairs, closing costs, interest rate buy down, etc.

A: Yes. The NAR settlement specifically allows for seller concessions to be offered to the Buyer as long as they are not conditioned on paying broker fees. The Buyer has the sole discretion of how any contribution toward their expenses would be used.

A: You will need to have the Note under Section 5 in the TR listing agreement (TR Form 1101) checked and TR Form 1412 – Seller’s Authorization to Release and Advertise Certain Information indicating the $ amount, signed by the seller.

A: In Matrix you can use the existing choice in the “Financing Considered” field called “Seller to Contribute to Buyers Closing Costs”.  This field is also displayed to consumers on HAR.com.

A: No. The field will only allow a dollar figure to be entered. The use of any contribution that is included in the final contract would be determined at the Buyer’s discretion.

A: No, this is an optional field and completely up to the seller.

A: No.

A: Yes. The dollar amount entered will be displayed near the top of every HAR.com listing that has something entered into the field.

A: Yes. The field will be seen by agents and consumers alike.

A: No.

A: The field was added to Matrix on July 9, 2024.

A: In addition to the newly-added field “Seller May Contribute to Buyer Expenses Up To $___” that allows you to express a fixed dollar amount that is highlighted on HAR.com, you will be able to write about concessions to buyers in the agent remarks so long as you do not make any reference to compensation or commission to the cooperating brokerage.

A: There are two proposed rule changes that are part of the settlement. NAR has agreed to put in place a new rule prohibiting offers of compensation on the MLS. Brokers and agents will have to negotiate compensation directly with their client. Additionally, NAR will require agents to enter into written buyer agreements with their buyers before touring a home.

A: Subject to the court’s approval, the deadline for MLSs to implement the required rule changes will be August 17, 2024.

A: According to NAR rules under which we must operate, being a REALTOR means joining the national, state, and local associations. REALTOR® means member of the National Association of REALTORS®. Therefore, all REALTORS® belong to the National Association of REALTORS® and agree to abide by our Code of Ethics. In order to maintain REALTOR® membership, members must pay local, state, and national association dues and assessments. There is no ability to bifurcate membership between local, state, or national associations.

A: HAR dues will remain unchanged as they have for the last 20 years. When it comes to NAR dues, NAR says its dues will not go up in 2024 and 2025 because of the payment that is being made as part of the settlement.

A: Texas REALTORS® is updating its forms. Revised and new forms will be available in the Forms Library on June 24. These updates will ensure you comply with MLS policy changes when using Texas REALTORS® forms, increase transparency and clarity regarding broker compensation and provide flexibility for use with various business and compensation models.

A: On June 11, the VA announced a temporary policy allowing VA buyers to compensate their buyer broker directly while determining when a formal rulemaking process is necessary. NAR will continue to monitor and provide updates as they occur. The VA home loan guaranty program is a vital homeownership tool that provides veterans with a centralized, affordable, and accessible method of purchasing homes as a benefit they earned for their service to our nation. Under previous VA policies, veterans using the home loan benefit were prohibited from compensating their professional representative directly. This policy put VA buyers at a disadvantage in situations where offers of compensation are not offered from a seller, potentially forcing them to forego professional representation, choose a different loan product, or exit the market entirely.

A: No. Under the settlement, buyers still have the same options when it comes to compensating their real estate representatives. That is, the listing brokers can compensate the buyer broker, the seller can compensate the buyer broker, or the buyer can compensate their broker directly. Based NAR’s interpretation of current guidance, buyers should still be able to get financing from Fannie Mae, Freddie Mac, and the FHA under these scenarios. NAR is working to verify that this interpretation will hold. However, none of these agencies will allow the buyer to finance a commission into the mortgage at this time.

A: According to NAR, financing commissions is not feasible under the current structure of the residential mortgage finance system, and there is no clear short-term legislative or regulatory fix.

A: This settlement would preserve the choices consumers have regarding real estate services and compensation.

-After the new rule goes into effect, listing brokers and sellers could continue to offer compensation for buyer broker services, but such offers could not be communicated via the MLS. The settlement expressly provides that sellers may communicate seller concessions — such as buyer closing costs — via the MLS provided that such concessions are not conditioned on the use of or payment to a buyer broker.

A: The field for offers of compensation will no longer be allowed in the MLS, so an agent working with a renter would need to contact the property manager/owner/leasing agent to find out what, if any, compensation is being offered.

A: No. The settlement only deals with residential real estate. There are no changes that would be required for the commercial real estate industry as a result of the settlement.

• -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.

A: No. The MLS rules for off market sales or pocket listings are not impacted by the proposed settlement.

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.

 

A: If you missed the webinars that covered an overview of the changes to the MLS, process and the contracts/forms, you may watch the recording HERE.

For a more in-depth review of the contracts/forms changes—and new forms—you may take the below course. We are waiving any fee for this course to ensure our subscribers are able to continue to do business without any hiccups. Additionally, you will receive 3 hours of CE for taking this below course.

Course: The Forms You Need to know – https://www.har.com/education/course_detail/21/1627/#class-schedule

If you have a minimum of 25 attendees, a broker/manager may also request to have one of HAR’s member outreach specialists come present the changes at your office by going to https://cms.har.com/remote-learning/ or by emailing remotetraining@har.com.

A: The DOJ investigation is a completely separate legal process from the proposed settlement, so it would have no impact on it. What it does mean is that there could still be practice changes down the road as a result of the DOJ investigation. However, there is a chance that the DOJ could oppose or concur with the current settlement depending on what it files, if anything, with the court that will ultimately approve the settlement or not.

A: You can find more information as well as FAQs on NAR’s website.

A: You can find more information in Spanish on NAR’s website.