Important NAR Changes Effective August 17, 2024: What You Need to Know
The National Association of Realtors® (NAR)’s significant practice changes are taking effect, following the Proposed Settlement Agreement aimed at resolving claims related to broker commissions. These updates will be implemented nationwide, impacting how real estate transactions are conducted. Here’s what you need to know:
1. Prohibition of Compensation Offers on MLSs
One of the most significant changes is the prohibition of offers of compensation on Multiple Listing Services (MLSs) owned exclusively by one or more REALTOR® Associations. Here’s what this means:
No Compensation Offers on MLSs: MLSs will no longer display offers of compensation to buyer’s agents. Compensation offers will need to be negotiated off-MLS directly between consumers and real estate professionals.
Alternative Compensation Options: Buyers and sellers can still discuss and agree on compensation through negotiations outside the MLS system, providing flexibility in how compensation is handled.
2. Written Buyer Agreements Required
Another key change is the requirement for agents working with buyers:
Written Buyer Agreement: Before a buyer can tour a home, their agent must enter into a written buyer agreement. This agreement does not mandate a specific type of relationship or agency agreement but ensures a formalized commitment between the agent and the buyer.
Class Notice for Home Sellers
August 17, 2024, also marks the first date that members of the “Settlement Class”—home sellers who sold a property on an MLS during the eligible date ranges and paid a commission—will receive information about NAR’s proposed settlement of the Sitzer-Burnett case. Here’s what sellers can expect:
Class Notice: Sellers will receive notice via mail and electronically, informing them of their rights, options, and deadlines related to the proposed settlement.
Further Information: For more details, including what this means for REALTORS® and consumers, visit NAR’s video and the settlement website, or call the settlement administrator at 888-995-0207.
What This Means for Buyers, Sellers, and Realtors®
For Buyers:
Transparency in Compensation: Without MLS compensation offers, buyers will need to negotiate compensation directly with their agents, which may lead to more personalized and transparent discussions.
For Sellers:
Clearer Negotiation Process: Sellers will benefit from a clearer process for negotiating agent compensation, as it will be handled outside the MLS.
For Realtors®:
Updated Practices: Agents will need to adjust their practices to comply with the new MLS rules and ensure that all buyer agreements are properly documented before home tours.
Additional Resources
For the latest updates on the settlement and practice changes, and for resources to assist with implementation, visit facts.realtor.
About the National Association of Realtors®
The National Association of Realtors® is the largest trade association in America, representing 1.5 million members involved in both residential and commercial real estate. REALTORS® adhere to a strict Code of Ethics, ensuring high standards of professional conduct.
