How the NAR Settlement Impacts Buyers and Sellers

Practice Change Resources for Buyers, Sellers, and GAR/GMLS Members

This page will be updated as more information and resources become available. (Last Update: 11/12, 04:15PM)

On March 15, 2024, the National Association of REALTORS® (NAR) announced a settlement with plaintiffs to resolve legal disputes related to broker commissions on behalf of home sellers. The NAR settlement introduced changes to real estate transactions that impact buyers, sellers, and real estate professionals. Consumers will continue to have choices regarding the real estate services they obtain. These new practices are effective as of August 2024.Screenshot 2024 11 12 At 3.54.16 pm

NAR has announced its new "Consumer Guides" series—a collection of helpful one-page resources for homebuyers and sellers. NAR’s Consumer Guides are valuable tools that can empower realtors with clear and concise information for their clients.

For Homebuyers:

How the NAR settlement impacts homebuyers in Greenwich:

  • Homebuyers will need to sign a written agreement with their agent before viewing a property.
  • Written agreements are required for both in-person and virtual tours, but are not required for speaking to an agent at an open house or inquiring about their services.
  • Before signing the agreement, homebuyers should confirm that it accurately reflects the terms that have been negotiated with their agent, the exact services and value being provided, and the costs.
  • The buyer agreement must disclose the following four components regarding compensation:
    1. A specific disclosure of the amount or rate of compensation the real estate agent will receive and how the amount has been determined.
    2. Objective compensation terms that are not open-ended or vague (e.g. $0, X flat fee, X percent, X hourly rate).
    3. A clause preventing the agent from accepting higher compensation from other sources than what is agreed upon in the agreement with the buyer; and,
    4. A conspicuous statement that broker fees and commissions are negotiable and not set by law.
  • Sellers may offer compensation to buyer’s agents, but this information cannot be shared on the Multiple Listing Service (MLS).
  • Homebuyers can still negotiate concessions from the seller, such as offers to pay closing costs.

For Home Sellers:

How the NAR settlement impacts home sellers in Greenwich:

  • Sellers can still choose to offer compensation to buyer brokers, which can help attract more potential buyers.
  • Seller agents are required to provide clear, written disclosures about any payment they plan to make to another broker representing buyers, and you must approve this beforehand. This disclosure should specify the payment amount or rate.
  • Sellers can offer compensation, but seller’s agents cannot list this offer on the Multiple Listing Service (MLS), which is used to share property information.
  • Seller agents can promote a seller’s listing and offer of compensation through off-MLS channels, such as social media, flyers, and websites.
  • Sellers can still provide concessions to buyers, like covering closing costs, within the MLS.

 

For GAR/GMLS Members:

The following practice changes are effective as of August 17, 2024 for GAR Members and Greenwich MLS Participants and Subscribers:

  • Offers of Compensation are prohibited in the Greenwich MLS and any broker compensation fields and compensation information must be eliminated from the MLS system.
  • MLS Participants working with a buyer must enter into a written agreement with the buyer prior to touring a home or asking for confidential information.

GAR/GMLS Practice Changes Presentation Slides

  • Detailed implementation guide with guidance on FAQs, links to Forms, and additional resources.

Updated 10/28/24: GAR BYLAWS & GMLS REGULATIONS Available on the Resources Page

  • Eliminate and prohibit any requirement of offers of compensation on an 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 on an MLS to buyer brokers or other buyer representatives.
  • Require an MLS to eliminate all broker compensation fields and compensation information on an MLS.
  • Require an 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 an 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

(NAR FAQ #19: https://www.nar.realtor/the-facts/nar-settlement-faqs)

Resources & Forms

  • Facts.Realtor

    • Your resource for all of the latest information and updates related to the NAR Settlement including: Settlement FAQs, Written Buyer Agreements 101, Broker-to-Broker Agreements, Window to the Law: Settlement Facts (Video Series), Summary of MLS Policy Changes, Settlement Timeline, Resources for Homebuyers, Resources for Home Sellers

NAR FAQ Highlights

  • If the sales contract is executed before the MLS policy change, the buyer broker should be able to rely upon the offer of compensation even if closing occurs after the date of the policy change.
  • But if a sales contract is not executed before the date the participant’s MLS implements the policy changes, the offer on an MLS will not be valid and buyers and buyer brokers may wish to protect themselves in writing with the listing broker or seller through a broker agreement or by including the offer of compensation in the sales contract.
  • If the listing agreement instructs the listing broker to make an offer of compensation without reference to an MLS, no change to the listing agreement is needed, as the listing broker can comply with that instruction without violating the MLS policy change.
  • But if the listing agreement specifies that offers of compensation be made on an MLS then the listing broker should work with the seller to amend the listing agreement before the MLS policy change is implemented, to make it clear the listing broker will not make an offer of compensation on an MLS and to determine whether the seller instructs the listing broker to make an offer of compensation outside of an MLS. (Added 5/29/2024)
  • MLS Participants working with sellers must disclose in conspicuous language that broker commissions are not set by law and are fully negotiable.
  • MLS Participants must include the disclosure in the listing agreement, if the listing agreement is not a government-specified form.  If the listing agreement is a government-specified form, a separate disclosure would satisfy the requirement. (Added 5/29/2024)
  • The written agreement must include:
  1. 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.
  2. The amount of compensation in a manner that is objectively ascertainable and not open-ended.
  3. 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; and
  4. A conspicuous statement that broker fees and commissions are not set by law and are fully negotiable.

Upcoming Education Sessions for Greenwich MLS Participants & Subscribers