The NAR Lawsuit: Explained
If you’ve seen the news lately, you’ve seen the recent settlement involving the National Association of REALTORS® (NAR). It introduced new practices that will impact your home buying and selling experience. But don’t worry — I’m here to break down what these changes mean for you!
The settlement achieves two goals: protecting REALTOR® members to the greatest extent possible and preserving consumer choice. The settlement:
Resolves claims against NAR and nearly every member; all state, territorial and local REALTOR® associations; all association-owned MLSs; and all brokerages with a NAR member as principal whose residential transaction volume in 2022 was $2 billion or below.
Preserves cooperative compensation as an option for consumers looking to buy or sell a home—as long as such offers of compensation occur off of the MLS.
What the Settlement Means for Homebuyers:
Written Agreements for Home Tours: Starting August 17, you'll need to sign a written agreement before you tour a home with an agent. This requirement applies to both in-person and virtual home tours. You won’t need an agreement if you're asking questions at an open house. Use this opportunity to clarify what services you’ll receive and how much they will cost. (Allie’s note: I think this makes things more difficult for first-time buyers or someone who hasn’t decided on an agent yet, but I do understand the purpose of this with the contract changes.)
Compensation Transparency: While the seller may offer to pay your agent, compensation will no longer be listed on the Multiple Listing Service (MLS), Zillow, or anywhere else online. You can still negotiate and accept concessions like closing cost assistance from the seller. (Allie’s note: I think this makes things LESS transparent, but what do I know!?)
Ongoing Negotiability: Compensation for your agent remains fully negotiable. An agent who is a REALTOR® (me, hi!) must follow the REALTOR® Code of Ethics, ensuring they discuss and agree on compensation transparently.
What the Settlement Doesn’t Change for Homebuyers
Ethical Guidance: REALTOR® agents are committed to working in your best interest and must adhere to ethical guidelines.
Negotiable Compensation: The settlement doesn’t affect your ability to negotiate compensation with your agent. Always discuss fees and services upfront to avoid surprises.
Choice and Flexibility: You have options and flexibility in choosing how you work with your agent and choosing the right agent for you. Understand your choices! (Allie’s note: who you choose matters!!)
What the Settlement Means for Home Sellers
Compensation Offers: You can still choose to offer compensation to buyer brokers to make your home listing more attractive. However, any such offers won’t be posted on the MLS or other syndicated sites starting August 17. They will be communicated by agents outside the MLS.
Disclosure Requirements: If you decide to offer compensation to a buyer’s agent, your agent must:
- Disclose the amount or rate of the compensation in writing.
- Obtain your approval before making any such offer.Advertising Your Listing: While MLS will not show compensation offers, I can still advertise your listing through other channels like social media, flyers, and personal websites.
Seller Concessions: You can still offer buyer concessions on an MLS, like covering closing costs or repairs from inspections.
What the Settlement Doesn’t Change for Home Sellers
Agent Support: As your agent, I remain committed to helping you through the selling process and must follow ethical standards as a REALTOR®.
Negotiable Compensation: Just like with buyers, your compensation to your agent is negotiable. Discuss this to align on expectations and terms!
Marketing Choices: You have options for how your home is marketed and sold. Collaborate with me to understand all available choices to optimize your selling strategy.
Navigating the real estate market is complex, but understanding these changes can help you make informed decisions whether you’re buying or selling a home. Always feel free to reach out to me with any questions. I am here to help you at each and every step of the journey.
