NAR Settlement
Overview
On March 15, 2024, the National Association of REALTORS® (NAR) announced a proposed settlement agreement that would end litigation of claims brought on behalf of home sellers related to broker commissions. The settlement is subject to court approval.
August 17 is the deadline for practice changes required by the NAR’s settlement.
Don’t delay—get details about the changes, including new rules around offers of compensation and written buyer agreements: FACTS.REALTOR. #NARFacts
Pro Tip: Open the FAQ on facts.realtor and do a word search to quickly find answers to your questions.
Get talking points and materials to use with sellers and buyers at COMPETITION.REALTOR.
Timline for Changes in BrokerBay & Flexmls
By opting into the Settlement Agreement, Greater Chattanooga REALTORS® must comply with the settlement terms:
• Remove (by August 17) & Prohibit offers of compensation on the MLS (and MLS-related entities such as BrokerBay)
• Agents working with a buyer must enter into a written agreement before touring a home.
The practice changes are detailed here, and clarifying information is available in NAR's FAQ on facts.realtor.
To aid all members with compliance, we've worked with our vendors to make the following changes within BrokerBay and Flexmls.
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August 7: BrokerBay will remove the Commission field (populated by Flexmls) and make the Brokerage Remarks field read-only to prevent agents from adding compensation-related info.
August 14: An optional Seller Concessions Offered Y/N field will be added to Flexmls. If Y, another optional field will be available to enter the dollar amount of concessions the Seller is offering to the Buyer.
August 16: Flexmls will remove the Co-op Commission fields and documents.
August 16 (or sooner): MLS Rules will be updated to incorporate the changes required by the NAR Settlement.
August 30 (or sooner): BrokerBay will streamline the showing request flow so agents cannot book a showing without acknowledging that a buyer agreement has been signed.
Frequently Asked Questions
We can't stress enough the importance of using the FAQ on facts.realtor, which answers 100+ of your questions. Below are a few of the common questions posed to your leadership in recent office visits.
What is the penalty for a listing agent using the MLS to convey an offer of co-op compensation? The MLS is discussing the item at their August 8th meeting. In the meantime, we can't stress enough the prohibition on using the MLS to communicate any offer of co-op compensation. Doing so will be much more serious than any local sanction, as violating the terms of the settlement agreement make all MLS users liable for breaching the terms of the settlement agreement.
Do agents have to wait until August 17 to implement the required practices changes? No. Implementing the required priactice changes may be done sooner than August 17. Please seek guidance from your Managing Broker and firm policy.
Does the requirement for a written agreement with buyers mean that MLS Participants and buyers must enter into a written agency agreement? No. MLS Participants and buyers will still be able to enter into any type of professional relationship permitted by state law. (Source NAR's FAQ # 59)
How will offers of compensation be communicated? Offers of compensation 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. (Source NAR's FAQ #34)
Wait, doesn’t Standard of Practice 16-16 prohibit me from negotiating my commission after showing, during the purchase offer phase, or after we have an accepted offer? Absolutely not! Except for the fact that you cannot make an offer to purchase contingent upon an increase in compensation paid to you by the listing broker, you can negotiate your commission with the listing broker at any time during the transaction. Standard of Practice 16-16 is designed to protect sellers and listing brokers from having purchase offers “held hostage” by cooperating brokers demanding a higher commission to be paid by the listing broker. (Source: NAR's Code Comprehension: Article 16 - Commission Are Negotiable)
Plan & Prepare
To help our members prepare for the changes, we've arranged for numerous training opportunities leading up to and after August 17. Registration is available in your Member Portal, and these offerings are complimentary to members for:
Accredited Buyer Representative (ABR) Designation
Real Estate Negotiations Expert (RENE) Designation
Seller Representative Specialist (SRS) Designation
Mission Critical: What Brokers Need to Know But Don't
A Critical Mission: It's Time fo Class! Compensation, Lawsuits. Agency, Sellers & Survival
TN Forms Changes
GA Forms Changes
Also, NAR is offering ABR at no cost to members throughout 2024, either live virtual/instructor-led OR online/self-paced.
Updated State Forms
GA forms have been released and available to GA REALTOR® Members (primary or secondary).
TN forms are available now to preview and will be released for use to TN REALTOR® Members (primary or secondary) on August 17.