Starting August 17, 2024, significant changes to the rules governing realtors and their clients will take effect as a result of the NAR (National Association of Realtors) commission lawsuit settlement. These changes primarily affect how commissions and compensation are handled in the real estate market. Here's a summary of the key new rules:
-
Elimination of MLS Compensation Offers: The new rules prohibit listing brokers or sellers from offering compensation to buyer brokers or other buyer representatives through the MLS (Multiple Listing Service). This change is intended to increase transparency and ensure that compensation details are handled outside the MLS system (www.nar.realtor) (Chicago Agent Magazine).
-
Definition of MLS Participation: The definition of an MLS Participant has been revised to emphasize cooperation rather than compensation. Participants are now required to share property information and make properties available for showings to benefit their clients (www.nar.realtor).
-
Prohibition on Compensation Information in MLS: All broker compensation fields and related information will be removed from MLS listings. Additionally, MLSs are prohibited from creating or supporting any mechanism outside the MLS for offering compensation to buyer brokers (Florida Realtors) (RISMedia).
-
Written Agreements with Buyers: Realtors working with buyers must enter into a written agreement with their clients before showing properties. This ensures clear terms and understanding between the realtor and the buyer regarding services and compensation (RISMedia) (Chicago Agent Magazine).
-
Compensation Disclosures: Realtors must disclose compensation details to sellers, prospective sellers, and buyers. This aims to provide more transparency in the transaction process (RISMedia).
-
Non-Discrimination in MLS Listings: The rules reinforce that MLS Participants and Subscribers cannot filter or restrict MLS listings based on the existence or level of compensation offered to cooperating brokers or the name of a brokerage or agent (RISMedia).
-
Settlement Implementation Timeline: While the mandatory policy changes take effect on August 17, 2024, MLSs that opt into the settlement have until September 16, 2024, to fully implement these changes and comply with NAR’s mandatory national policies (www.nar.realtor) (Florida Realtors).
These changes are part of a broader effort to reform industry practices following the settlement of the $418 million lawsuit in the Sitzer-Burnett case. The goal is to foster a more transparent and equitable real estate market for all parties involved (Chicago Agent Magazine). Some believe these new rules will lead to lower commissions overall. That remains to be seen.
Subscribe to my newsletter here.
Serving The Greater Fort Lauderdale area since 2006
You can reach me 954-895-2431
If You Like This Post, Please Share. Thanks!