As a part of its proposed settlement, NAR agreed to significant policy changes that will impact how all agents do business — and how buyer agents get paid.
March 15, 2024NAR's pending settlement agreement includes important changes to agent and broker business practices, most notably the removal of buyer agent compensation from MLS listings.
How will agents be impacted, and when will these changes go into effect?
Here are three things agents need to know.
Listing agents will no longer be allowed to include offers of compensation on the MLS. This rule will go into effect in mid-July, NAR said.
Previously, listing brokers had been required to enter a number in that field, and NAR had recently agreed that the number could be $0. Now, "the National Association of Realtors will no longer even require a listing broker to put in zero or a penny," an NAR executive told journalists during a press call.
Instead, agents and brokers will have to negotiate compensation directly with clients — outside the MLS. In other words, "if a seller wants to market their property by providing a benefit for buyers to come see that property, [they] can continue to do so," the NAR representative said.
Another big change coming in July is the use of buyer agency agreements. "We are now going from a strong recommendation to a mandate," an NAR rep said during the call.
NAR said that all MLS participants working on behalf of buyers "would be required to enter into written agreements with their buyers before touring a home."
Mandating agreements, NAR suggested, provides both transparency for consumers and flexibility in the types of services and level of value individual agents provide.
"Our 1.6 million members [represent] a wide variety of business models and compensation structures, from flat fees that are sometimes as low as $100 all the way up to the most expensive, white glove brokers," an NAR rep said.
Although listing and buyer-broker compensation will be decoupled, NAR said there are three main ways buyer agents can still get paid:
However, all forms of compensation have to be negotiated between agents and their clients directly.
NAR said the organization believes the rule changes will be positive for the industry, and market forces continue to determine how agents are compensated.
"We're confident that both broker competition and seller and buyer competition will not be directly impacted by this," a rep said to reporters. "We don't set or recommend or set commissions — the commissions are set by the market and we expect the market will operate how the market operates."