What Does The NAR Settlement Mean For Buyers

The National Association of REALTORS® (NAR) has recently settled litigation concerning broker commissions, introducing significant changes effective August 17, 2024, aimed at enhancing transparency and consumer choice in real estate transactions.

Key changes include the requirement for real estate agents listing properties on Multiple Listing Services (MLS) to enter into written agreements with buyers before home tours. These agreements must clearly disclose the agent's compensation amount or rate, ensuring it is specific and objective (e.g., flat fee, percentage), not open-ended. Agents are prohibited from receiving compensation exceeding what is agreed upon with the buyer, reinforcing the negotiability of broker fees.

Additionally, the settlement prohibits the display of compensation offers between real estate professionals on MLS platforms, although sellers can still offer compensation outside of MLS listings. Buyer concessions, such as those for closing costs, remain permissible on MLS listings.

For home buyers and sellers, these changes underscore the importance of understanding the services provided by their agents and the associated costs. Written agreements are now mandatory for both in-person and virtual home tours facilitated through MLS listings. However, casual interactions like open house visits or general inquiries do not require such agreements.

Consumers are encouraged to inquire about agent services, compensation structures, and the implications of these written agreements when selecting a real estate professional. The initiative aims to empower consumers with clearer information and choices, aligning with NAR's advocacy for transparency and fair practices in the real estate industry.