-
NAR Settlement Policy Changes go into effect August 17th, 2024!
Here is what Realtors need to know:
Changing Business Practices
The settlement agreement also mandates two key changes to the way members and MLS participants do business.
- NAR agreed to create a new MLS
rule prohibiting offers of compensation on the MLS. This means that offers
of compensation could not be communicated via an MLS, but they could
continue to be an option consumers could pursue off-MLS through
negotiation and consultation with real estate professionals. - NAR also agreed to create a new
rule requiring MLS participants working with buyers to enter into written
agreements with their buyers before the buyer tours a home.
Real estate agents who use and list properties for sale on a Multiple Listing Service (MLS)—a local marketplace used by real estate professionals (both buyer brokers and listing brokers) to share information about inventory in a particular area—will be required to enter into written agreements with buyers before touring a home. Those written agreements must include:
<ul type=”disc”>
- A specific and conspicuous
disclosure of the amount or rate of compensation the real estate agent
will receive or how this amount will be determined.- Compensation that is objective
(e.g., $0, X flat fee, X percent, X hourly rate)—and not open-ended (e.g.,
cannot be “buyer broker compensation shall be whatever the amount the
seller is offering to the buyer”).- A term that prohibits the agent
from receiving compensation for brokerage services from any source that
exceeds the amount or rate agreed to in the agreement with the buyer; and- A conspicuous statement that
broker fees and commissions are fully negotiable and not set by law.NAR has long encouraged its members to use written agreements with buyers because they help consumers understand exactly what services they have agreed to, the roles and responsibilities, and the amount. For this reason, several states already have laws requiring buyer agreements.
There are also changes to how and where real estate professionals may communicate with each other about offers of compensation. These offers are no longer allowed on Multiple Listing Service (MLS) platforms. Sellers can still offer compensation off an MLS. Sellers can offer buyer concessions on an MLS (for example—concessions for buyer closing costs).
Things to know as a home buyer or seller:
<ul type=”disc”>
- If you are a buyer and your
agent is using an MLS, you will need to sign a written agreement with your
agent before touring a home so you understand exactly what services will
be provided, and for how much.- Written agreements are required
for both in-person and live virtual home tours.- You do not need a written
agreement if you are just speaking to an agent at an open house or asking
them about their services.- Agent compensation for home
buyers and sellers continues to be fully negotiable.- When finding an agent to work
with, ask questions about their services, compensation and these written
agreements.- More details about these changes
and what they mean can be found at facts.realtor.-
This discussion was modified 3 months, 1 week ago by
Sonny.
nar.realtor
Whether you’re a REALTOR®, brokerage leader, MLS executive, homebuyer, or home seller, the resources here provide the facts and latest updates on NAR's settlement agreement related to broker commissions.
- NAR agreed to create a new MLS
-
1 Reply
-
Great informative news for us. Thank you for sharing, Sonny