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NAR Settlement: Must-Know Practice & Policy Changes

Confused? Here are answers to frequently asked questions about the NAR settlement.

There is much confusion over what is required and what really happened when the National Association of Realtors® (NAR) proposed a settlement of the commission lawsuits. The settlement has been preliminarily approved. At press time, there are changes that NAR plans to implement in August that must be implemented by Realtor® MLSs, opting-in non-Realtor MLSs and brokerages by September 16, 2024.

Here are the facts directly from the NAR’s settlement FAQ page to help you prepare:

What MLS policies have changed?

The policy changes, agreed to by NAR leadership, were reviewed and updated with the changes as outlined below:

  • Eliminate and prohibit any requirement of offers of compensation in the MLS between listing brokers or sellers to buyer brokers or other buyer representatives.
  • Retain, and define, "cooperation” for MLS Participation.
  • Eliminate and prohibit MLS Participants, Subscribers and sellers from making any offers of compensation in the MLS to buyer brokers or other buyer representatives.
  • Require the MLS to eliminate all broker compensation fields and compensation information in the MLS.
  • Require the MLS to not create, facilitate or support any non-MLS mechanism (including by providing listing information to an internet aggregator’s website for such purpose) for Participants, Subscribers or sellers to make offers of compensation to buyer brokers or other buyer representatives.
  • Prohibit the use of MLS data or data feeds to directly or indirectly establish or maintain a platform of offers of compensation from multiple brokers or other buyer representatives.  Such use must result with the MLS terminating the Participant’s access to any MLS data and data feeds.
  • Reinforce that MLS Participants and Subscribers must not, and MLSs must not enable the ability to filter out or restrict MLS listings that are communicated to customers or clients based on the existence or level of compensation offered to the cooperating broker or the name of a brokerage or agent.
  • Require compensation disclosures to sellers, and prospective sellers and buyers.
  • Require MLS Participants working with a buyer to enter into a written agreement with the buyer prior to touring a home.

When will practice changes go into effect?

On August 17, NAR’s mandatory MLS policy changes, which implement the settlement’s required practice changes, will take effect.

The settlement requires NAR to implement the practice changes no later than the date of class notice. Through the preliminary settlement approval process, we now know the earliest date of class notice is August 17, 2024.

Additionally, to comply with NAR’s mandatory national MLS policies, Realtor MLSs must implement the practice changes by August 17.

NAR shared these practice changes in early May to provide a three-month window for NAR members and MLSs to prepare to implement these changes.

The opt-in agreements in the appendices indicate that MLSs that opt in to the NAR settlement have until September 16, 2024, to implement changes. Should MLSs also implement the practice changes by August 17, 2024?

MLSs that have opted into the settlement agreement have until September 16, 2024, to implement the necessary policy changes and to be considered Released Parties under the settlement, as provided in the relevant appendices they executed.

However, in accordance with mandatory NAR policy, Realtor MLSs must implement the practice changes by August 17, 2024.  If they do not, they will not be in compliance with NAR mandatory policy. NAR recommends all MLSs opting into the settlement implement the practice changes by August 17, 2024.

NAR’s accelerated rule change process, during which it released the exact language of the practice changes in early May, gives MLSs over three months to implement the changes by August 17, 2024.

Does this mean buyers won’t have to use a buyer broker to purchase a property?

As always, the consumer chooses whether to use a real estate professional. Research has confirmed that consumers find great value in the services provided by a buyer broker, and we continue to believe it is imperative for buyer brokers to clearly articulate what services and value they are providing to consumers.

Does this mean buyer brokers may have to work for free?

No. We have long believed that it is in the interest of the sellers, buyers and their brokers to make offers of compensation—but using the MLS to communicate offers of compensation will no longer be an option.

The types of compensation available for buyer brokers would continue to take multiple forms, including but not limited to:

  • Fixed-fee commission paid directly by consumers.
  • Concession from the seller.
  • Portion of the listing broker’s compensation.
  • Compensation would continue to be negotiable and should always be negotiated between agents and the consumers they represent.

How will buyer brokers get paid now?

Offers of compensation will continue to be an option consumers can pursue off-MLS through negotiation and consultation with real estate professionals.

Why was prohibiting the publication of compensation offers in the MLS part of the settlement?

While NAR has long maintained—and we continue to believe—that cooperative compensation and NAR’s current policies are good things that benefit buyers and sellers, we also acknowledge that continuing to litigate would have hurt members and their small businesses, so have agreed to put in place a new rule prohibiting offers of compensation on the MLS.

This is consistent with NAR’s long-maintained position that prohibiting all offers of cooperative compensation entirely would harm consumers and be inconsistent with real estate laws in the many states that authorize them.

NAR believes this agreement provides a path forward for our industry and NAR.

Does this prohibition affect the compensation amount paid to the listing broker?

Compensation would continue to be negotiable and should always be negotiated between agents and the consumers they represent.

What should listing brokers advise their clients about the prohibition of offers of compensation on an MLS?

Listing brokers should inform their clients that offers of compensation will no longer be an option on an MLS.

This change will not prevent offers of cooperative compensation off an MLS. And it will not prevent sellers from offering buyer concessions on an MLS (for example concessions for buyer closing costs).

Compensation would continue to be negotiable and should always be negotiated between agents and the consumers they serve.

How will offers of compensation be communicated if brokers can’t use MLSs? Doesn’t this just make broker compensation less transparent?

Offers of compensation could continue to be an option consumers can pursue off-MLS through negotiation and consultation with real estate professionals. And sellers can offer buyer concessions on an MLS (for example—concessions that can be used for buyer closing costs).

The settlement does not change the ethical duties that NAR members owe their clients.

Realtors® are always required to protect and promote the interests of their clients and treat all parties in a transaction, honestly (Article 1, COE).

NAR members will continue to use their skill, care and diligence to protect the interests of their clients.

NAR remains dedicated to promoting transparency in the marketplace and working to ensure that consumers have access to comprehensive, equitable, transparent and reliable property information, as well as the ability to have affordable professional representation in their real estate transactions.

Won't prohibiting offers of compensation on the MLS raise fair housing issues?

This settlement allows compensation to remain a choice for consumers when buying or selling a home.

NAR continues to believe that offers of compensation help make professional representation more accessible, decrease costs for homebuyers to secure these services, increase fair housing opportunities and increase the potential buyer pool for sellers.

If the seller or the listing broker offers a bonus or financial incentive in addition to the offer of broker compensation, can the buyer broker accept the extra compensation?

The buyer broker may not receive compensation for brokerage services from any source that exceeds the amount or rate agreed to in the agreement with the buyer.

Does Standard of Practice 16-16 prohibit the negotiation of buyer broker compensation in a buyer’s purchase offer?

No. A buyer can always ask their buyer broker to make it a term of an offer to purchase that the seller pay certain compensation to the buyer broker.

Standard of Practice 16-16 prohibits a Realtor from attempting to modify the terms of a listing agreement through the terms of an offer because the listing agreement is a contractual matter between the seller and the listing broker. However, the seller and the listing broker may independently choose to amend the listing agreement or take any other action they deem appropriate based on the seller’s negotiations with the buyer. Standard of Practice 16-16 also prohibits a Realtor from delaying or withholding delivery of a buyer’s offer while attempting to negotiate a buyer broker compensation.

What provisions must be included in written buyer agreements?

The written agreement must include:

  • A specific and conspicuous disclosure of the amount or rate of compensation the Participant will receive or how this amount will be determined, to the extent that the Participant will receive compensation from any source.
  • The amount of compensation in a manner that is objectively ascertainable and not open-ended.
  • A term that prohibits the Participant from receiving compensation for brokerage services from any source that exceeds the amount or rate agreed to in the agreement with the buyer.
  • A conspicuous statement that broker fees and commissions are not set by law and are fully negotiable.

The practice change requiring written agreements with buyers is triggered by two conditions: It only applies to MLS Participants “working with” buyers and is triggered by “touring a home.” What does it mean to be “working with” a buyer?

The “working with” language is intended to distinguish MLS Participants who provide brokerage services to a buyer—such as identifying potential properties, arranging for the buyer to tour a property, performing or facilitating negotiations on behalf of the buyer, presenting offers by the buyer or other services for the buyer—from MLS Participants who simply market their services or just talk to a buyer—like at an open house or by providing an unrepresented buyer access to a house they have listed.

If the MLS Participant is working only as an agent of the seller, then the participant is not “working with the buyer.” In that scenario, an agreement is not required because the participant is performing work for the seller and not the buyer.

At press time, the settlement was preliminarily approved. However, there are many nuances being worked out. NAR has a website that offers up-to-date information about details of the settlement and its status. Find it at

All information in this article was deemed accurate at publication. Please seek legal counsel if you are unclear on continuing business practices. #

Tracey C. Velt is a contributing editor for Florida Realtor® magazine.