The National Association of Realtors (NAR) settled a series of class action lawsuits in March 2024 that alleged that NAR and some of the largest brokerage firms unlawfully conspired to raise, fix or maximize the commissions and violated antitrust laws.  The claim was that NAR’s commission rules, particularly for cooperative compensation, stifled price competition, led to inflated commissions, and buyers’ agents would not show listings that offered a lower commission.

The $418 million settlement has changed some of the requirements and procedures effective August 17, 2024.  We explore what those changes may mean to you.

Sellers:

• You have a choice to offer compensation to buyer brokers.  Doing so may make your listing more attractive to buyers.
• Your agent must disclose to you and obtain approval for any payment or offer of payment that the listing broker will make to a buyer’s broker.  The disclosure must be made in writing and in advance.
• Offers of compensation to the buyer’s broker cannot be included on the Multiple Listing Service (MLS) but will be communicated on our website, and by phone, email or text inquiry.
• You can offer buyer concession to assist with buyers closing costs.

What the settle doesn’t change for Sellers:

• Realtors ® will help you navigate the process of selling your home and are ethically obligated to work in your best interest.
• Compensation for your agent is fully negotiable. When finding an agent to work with, ask questions about compensation and discuss what you would like to offer buyers.  Your agent will help you understand the choices you have to make in making the best decision for your needs.

Source: Home Sellers: Here’s What the NAR Settlement Means for You

Buyers:

• You are required to sign a written agreement with your agent before touring a home.  The agreement will outline the services and value you have negotiated with your agent and for how much.
• The agreement includes four components related to compensation for the agent:
  • Disclosure of the amount or rate of compensation the agent will receive or how the amount will be determined.
  • Compensation that is objective (e.g. $0, $x flat fee, x percent, x hourly rate) and cannot be 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.
  • A statement that broker fees and commissions are fully negotiable and not set by law.
• Written buyer agreements apply to in-person and live virtual tours.
• A written agreement is not needed if you are attending an open house.
• The seller may agree to offer compensation to the buyer agent.  The offer cannot be shared on the MLS.
• A buyer can still accept concessions from the seller (e.g. to help cover closing costs)

What the settle doesn’t change for Buyers:

• Realtors ® will help you navigate the process of homebuying process and are ethically obligated to work in your best interest.
• Compensation for your agent is fully negotiable. When finding an agent to work with, ask questions about compensation and understand what services you are receiving.
• You have choices.  Work with your agent to understand the full range of choices when buying a home, which will help you make the best decision for your needs.

Source: Homebuyers: Here’s What the NAR Settlement Means for You
 

If you have any questions about buying or selling a home, please contact any of our agents for more information on how to proceed.