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:

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 .

Things to know as a home buyer or seller:

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 5 months, 1 week ago by  Sonny.
• This discussion was modified 4 weeks ago by  Sapna Sharma.
• This discussion was modified 4 weeks ago by  Sapna Sharma.

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NAR Settlement: Get the Facts

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.