NAR Settlement Practice Changes
Overview
On March 15th, 2024, The National Association of REALTORS® (NAR) reached an agreement with plaintiffs that would end litigation of claims brought on behalf of home sellers related to broker commissions. The Settlement also includes some changes to real estate transactions, but importantly, consumers will continue to have choices regarding real estate services.
The following real estate practice changes will go into effect on August 17, 2024:
• If you are a buyer, you will need to sign a written agreement with your agent before touring a home so you understand exactly what services will be provided, and for how much.
• Offers of compensation are no longer allowed on Multiple Listing Service (MLS) platforms. Offers of compensation will continue to be an option consumers can pursue off-MLS through negotiation and consultation with real estate professionals.
REALTORS® are here for you and ready to serve you. Whenever you're looking to buy or sell property, look for a REALTOR® because they are the real deal.
Consumer Guides:
Written Buyer Agreements
As of August 17, 2024, you will be asked to sign a written buyer agreement after you’ve chosen the professional you want to work with. Here's what you should know about these agreements.
Open Houses and Written
As of August 17, 2024, many real estate professionals nationwide will be asking buyers to enter into a written agreement prior to touring a home. But what if you are just attending an open house? Here’s what you should know.
REALTORS’® Duty to Put Client Interests Above Their Own
REALTORS® abide by NAR's strict Code of Ethics. This obligation means that a REALTOR® cannot make decisions or provide representation in a way that puts their own interests or commissions ahead of their clients' interests.
What Veterans Need to Know About Buying a Home
Veterans and active servicemembers often have unique needs when looking for a home, and agents who are REALTORS® are committed to helping ensure those needs continue to be met following new real estate practice changes.
Offers of Compensation
An offer of compensation is when you—the seller—or your agent compensate another agent for bringing a buyer to successfully close the transaction. Here’s what you need to know as you consider your options related to offering compensation.
Negotiating Written Buyer Agreements
Homebuyers interview agents and negotiate written agreements that includes the services the agent will provide and the compensation they will receive. Here’s what you need to know about negotiating an agreement with an agent who is a REALTOR®.
What do the changes mean for sellers:
- You still have the choice of offering compensation to buyer’s agents.
- Your agent must clearly disclose to you and obtain your approval for any offer of compensation that a listing agent will make to a buyer’s agent.
- If you choose to approve an offer of compensation, there are changes to how this can happen. You as the seller can still make an offer of compensation, but your agent cannot include it on a Multiple Listing Service (MLS). Sellers may still offer compensation off an MLS.
- You as the seller can still offer buyer concessions on an MLS (for example, concessions for buyer closing costs).
What do the changes mean for homebuyers:
- You will sign a written agreement with your agent before touring a home. The state of Montana already requires written agreements between consumers and their agents, only now this must be signed prior to home showings (in-person and virtual).
- Before signing this agreement, you should ensure it reflects the terms you have negotiated with your agent and that you understand what services and value will be provided, and for how much.
- The seller still may agree to offer compensation to your agent, but the offer cannot be shared on a Multiple Listing Service (MLS).
- You may still accept concessions from the seller, such as offers to pay your closing costs.
What is NOT changing:
- Agents who are REALTORS® are here to help you navigate the process of selling or buying a home and are ethically obligated to work in your best interest.
- Compensation for your agent remains fully negotiable, and if your agent is a REALTOR®, they must abide by the REALTOR® Code of Ethics and have clear and transparent discussions with you about compensation.
- You have choices. Work with your agent to understand the full range of these choices when selling your home or buying a home, which will help you make the best possible decision for your needs.