Key Insights for Agents from the NAR Lawsuit Settlement

After the National Association of Realtors® (NAR) agreed to settle the Sitzer-Burnett lawsuit in March, there has been considerable discussion about the long-term effects on the real estate industry. The settlement includes several significant changes that agents need to be aware of, but the details can be a bit murky. We've gone through the full agreement and policy change summary to highlight nine key points that will impact most agents. Our aim is to clarify these changes so you can better navigate this new landscape.

Key Points from the NAR Settlement for Real Estate Agents

1. NAR Policy Changes Begin in August Although the settlement was announced in March, the changes don't go into effect until August 17, 2024. This timing allows the industry to adjust and prepare for the new policies.

2. Removal of Commission Offers from MLS Significant changes to NAR-affiliated MLS policies include:

   • Elimination of the requirement for listing agents to offer compensation to buyer agents.

   • Prohibition of including offers of compensation to buyer agents on the MLS; related fields will be removed.

   • No longer requiring offers of compensation to buyer brokers for MLS membership and participation.

   Consequently, agents will no longer be able to see or discuss commission offers on the MLS, though these can still be negotiated off-MLS.

3. MLSs Can't Use Alternate Sites to Share Commission Offers This rule prevents MLSs from using external platforms to circumvent the new policies. MLSs are also prohibited from providing data feeds that include commission offers to other sites.

4. Written Agreement Required Before Home Tours Agents must have a written agreement with buyers before touring homes. While not necessarily exclusive, this agreement clarifies the agent's role and the services provided. It's an opportunity to educate clients and ensure clear communication about expectations and compensation.

5. Clear Disclosure of Compensation Agents must clearly define their compensation in the buyer's agreement. The terms cannot be vague; specific amounts or rates must be outlined, ensuring transparency with clients.

6. Commissions Must Be Noted as Negotiable Agents are now required to explicitly state that commissions are negotiable. This must be clearly communicated in all agreements to ensure buyers and sellers understand their rights.

7. No Filtering Based on Commissions Agents cannot filter listings for clients based on the compensation offered. Additionally, agents cannot exclude listings based on the name of the brokerage or agent, ensuring equal consideration for all listings.

8. NAR to Develop New Educational Content NAR is tasked with creating new educational materials to explain the changes and removing outdated information. Staying updated on these resources will help agents remain compliant and inform their clients accurately.

9. Increased Consumer Awareness While many of the settlement’s stipulations reiterate existing policies, public awareness about these issues—especially regarding negotiable commissions—may increase. This awareness could influence how clients approach negotiations and expect transparency from agents.

These changes underscore the importance of transparency and communication in the real estate process. As the industry adapts to these new standards, agents must stay informed and proactive in educating their clients.