The NAR settlement will not directly cause REALTORS® to earn reduced commissions. Real estate commissions will continue to be negotiable and set by the marketplace.
Colibri Real Estate School is dedicated to real estate agents and the industry and will continue to keep you informed about the changes to the industry caused by the NAR settlement.
What Is the NAR Settlement?
The 2024 National Association of REALTORS® (NAR) settlement ended litigation of claims brought on behalf of home sellers related to buyer’s agent commissions. The settlement has received a lot of attention in the press. However, a lot of misinformation spread as a result of these headlines.
Here are five key settlement terms of which you need to be aware.
1. Release of liability
The settlement resolves all other similar claims against the NAR, its members, and some brokerages.
2. Changes in how offers of compensation are shared
NAR now prohibits offers of compensation on the MLS. This means that seller’s agents can no longer list buyer’s agent compensation offers on the agent-only section of an MLS. This change will go into effect on August 17, 2024.
3. Written buyer agreements
The settlement also states that MLS participants working with buyers must have written agreements with their clients. This change will also go into effect on August 17, 2024.
4. Settlement payment
Under the settlement terms, NAR will pay $418 million over approximately four years.
5. NAR denies any wrongdoing
Finally, even though the NAR agreed to the settlement terms, it’s important to note that the organization continues to deny any wrongdoing in connection with the MLS buyer compensation listings.
Impact on REALTORS® Commissions
The NAR never set REALTORS’® commissions. Real estate commissions will remain negotiable between the client and their agent representative.
Some say that commissions may change as a result of the new rules imposed by the settlement. However, this remains to be seen, as the free market will continue to dictate how much buyers and sellers will compensate their agents.
REALTORS® Reactions and Concerns
There’s been a wide range of reactions to the recent NAR court settlement. However, those with a long history in the real estate profession remain optimistic about its future.
“It’s going to cause us to have more conversations as a buyer’s agent – and as a seller’s agent taking listings,” said John Wenner, Senior Education Manager for Colibri Real Estate, during a recent webinar that discussed the topic. Wenner was referring to the written agreements that buyer’s agents must now have with clients before they can even tour a property.
Tina Lapp, Senior Director of Business Operations for Colibri Real Estate, said the changes are exciting.
“It’s an exciting time to enter and be part of these changes as we build and modernize the approach to real estate,” Lapp said.
The webinar, which can be found here, features discussions about the settlement and insights into changes that may occur post-settlement.
One constant is that those wanting to work as a buyer’s or seller’s agent must be licensed. Earn your state-specific real estate license with Colibri Real Estate School.
Colibri Real Estate School (formerly Real Estate Express) provides quality, affordable online real estate classes. We will keep you updated on industry changes and teach you the best practices for serving your clients.
Key Takeaways
- The NAR settlement does not directly reduce REALTORS® commissions. Commissions will remain negotiable and determined by the marketplace.
- Key changes include the prohibition of listing buyer’s agent compensation on the MLS and the requirement for written agreements between buyers and their agents. These changes are intended to increase transparency and formalize the relationship between buyers and their agents.
- The real estate community has mixed reactions to the settlement, but experienced professionals remain optimistic.
