Jim Doering President at Wisconsin Builders Association | Official website
Jim Doering President at Wisconsin Builders Association | Official website
The National Association of Realtors (NAR) has reached a settlement agreement that introduces significant changes to how real estate transactions are conducted, particularly regarding the negotiation and disclosure of compensation for brokers and agents.
Under the terms of the settlement, offers of compensation can no longer be communicated through Multiple Listing Services (MLS). Instead, these must be negotiated separately between sellers and their brokers or agents, as well as buyers and their respective representatives. "Agents and brokers working with buyers must enter into a written agreement with their buyers before taking buyers to tour a home," states the settlement.
The agreement releases NAR members from certain obligations as of August 17, 2024, unless they are employees of remaining defendants or individual NAR members with total transaction volumes below $2 billion in 2022. Non-NAR members who opted into the settlement are also released.
Regarding commissions, while MLS prohibits offers of compensation, sellers can still make such offers elsewhere. Buyers remain responsible for compensating their agents or brokers through various means such as direct payment or concessions from sellers. The method remains negotiable: "This is not an exhaustive list, and compensation continues to be negotiable."
The settlement does not prevent builders from paying buyer's broker commissions directly to agents rather than buyers themselves. Brokers have a duty to disclose received compensations to clients.
Written agreements are emphasized under this new framework. Buyers seeking representation must sign formal agreements with agents before touring properties. This requirement aims at transparency but may vary by state law.
For those considering joining the settlement class due to recent home sales, eligibility requirements differ by state. Interested parties can contact the settlement administrator for more information on qualification criteria.
Additional resources include NAR Settlement FAQs and an official website where claims can be filed.
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