Navigating the Settlements Virtual Town Hall Q&A Recap
Q. Does the settlement end all antitrust litigation for NAR and its members?
Yes, the agreement would release NAR and all NAR members, state and local associations, association-owned MLSs, and all NAR member brokerages with a residential transaction volume in 2022 of $2 billion or below. These groups will be released from liability for the types of claims brought in these cases on behalf of home sellers related to broker commissions.
Q. When exactly do agents have to start using buyer rep agreements, and at what point in working with buyers do they need to have them signed?
The NAR settlement changes will go into effect in mid-July 2024. The settlement provides that MLS participants working with buyers must enter into written agreements with those buyers before touring a home. We recommend that you begin using the agreements now, if you have not already started doing so.
Q. How does the settlement impact broker compensation in the MLS?
NAR has agreed to implement a new rule prohibiting offers of compensation on the MLS. However, offers of compensation could continue to be an option consumers can pursue off-MLS through negotiation and consultation with real estate professionals. Sellers can also offer buyer concessions on the MLS. For example, concessions for buyer closing costs.
Q. Can members still collect compensation as a buyer agent, and what does that look like?
Yes, the types of compensation available for buyer brokers will continue depending on broker-consumer negotiations. Compensation will continue to remain negotiable.
Here are some examples of how buyers' agents can be compensated:
Flat fee commission paid directly by buyers and sellers
Compensation from the buyer
Compensation from the seller
A portion of the listing broker’s compensation
A portion of compensation from the buyer and a portion from the seller
Concession from the seller
Q. If there will be no offer of compensation in the MLS when the field is removed, but sellers are allowed to compensate buyer agents, how and where will it be displayed or made known to buyers that the seller is willing to help compensate the buyer agent?
Offers of compensation could continue to be an option consumers can pursue off the MLS through negotiation and consultation with real estate professionals.
Listing brokers are allowed to display an offer of compensation for their listings directly on their brokerage website.
Sellers can offer buyer concessions on the MLS. For example, concessions that can be used for buyer closing costs.
Q. How exactly will buyers negotiate this with sellers? Can buyers include buyer agent compensation in the offer that they submit to the seller or seller’s agent?
Yes
Q. If the seller agrees to compensate the buyer agent, is the compensation between seller and buyer or seller broker/buyer broker?
It depends on how it is structured. REALTORS® AND MLS PARTICIPANTS acting for sellers will be required to disclose to sellers and obtain seller approval for any payment or offer of payment that the listing broker or seller will make to another broker or representative acting for buyers. The disclosure must be in writing, provided in advance of any payment or agreement to pay another brokerage acting for buyers, and the amount or rate of any such payment must be specified.
Q. What resources are available to help us navigate this?
The Broward, Palm Beaches & St. Lucie Realtors® and BeachesMLS are committed to making sure you have the information as it unfolds. We are sending multiple emails every week, so check your inbox or visit all of our resources and previous email communications on our landing page at rworld.com/settlement
Q. Will buyers be able to finance the commission they pay their agents, or will they have to go out of pocket for that expense?
Currently, mortgage lenders do not allow compensation to be added to home loans.
Q. What legal and ethical considerations should agents be aware of?
The settlement does not change the ethical duties that NAR members owe their clients. REALTORS® are always required to protect and promote the interests of their clients and treat all parties in a transaction honestly (Article 1, COE). NAR members will continue to use their skill, care, and diligence to protect the interests of their clients.
Q. Does NAR plan to raise our dues in the future?
No, NAR has stated that they will not change membership dues for 2024 or 2025 because of this settlement.
Q. Regarding the brokerages that are not included in the settlement, those doing over $2B in business a year – is NAR working to help them achieve a reasonable settlement?
Unfortunately, and despite NAR’s best efforts to fight for their inclusion, the release does not include brokerage firms whose residential transaction volume in 2022 was above 2 billion dollars. For those companies, the settlement provides an avenue they can pursue if they desire to be included in the release — but to be clear, the settlement does not obligate any of those companies to settle under these terms. The settlement provides a cap and an opportunity to mediate a different outcome, but it does not obligate these top brokerages to pursue this option if they don’t desire to.