National Association of Realtors Lawsuit Update
On March 15, 2024, a significant development unfolded within the real estate industry as the National Association of REALTORS® (NAR) disclosed a comprehensive nationwide settlement addressing commission lawsuits initiated by sellers across various states. It is imperative to note that the settlement is not final; its final approval by the court is pending, and the court is unsure when this may happen.
The proposal includes two pivotal rule changes as part of this new settlement. Firstly, NAR has committed to implementing a new regulation prohibiting compensation offers on the MLS. With the rule change, brokers and agents must directly negotiate compensation terms with their respective clients. Secondly, agents must formalize written buyer agreements with potential buyers before facilitating property tours.
These proposed rule changes would take effect mid-July, marking a significant shift in industry practices.
Key Practice Changes:
- Consumers retain the right to opt for cooperative compensation, provided it is pursued off-MLS through negotiations and consultations with real estate professionals.
- A new rule barring compensation offers on the MLS will be enforced, effective mid-July 2024.
Implications:
- Despite the prohibition of communicating compensation offers through the MLS, various avenues for compensating buyer brokers will persist.
- Compensation for buyer brokers will remain diverse and subject to negotiation between brokers and consumers. Compensation may include fixed-fee commissions paid directly by consumers, seller concessions, or a portion of the listing broker’s compensation.
- Negotiating compensation terms between agents and the consumers they represent will remain paramount.
- The industry may see reduced listing commissions and buyers responsible for paying their own representative.
- With these rapid changes to the real estate sales process, it is more important than ever to work with highly trained and qualified relocation agents for both selling and buyer.
- This announcement heralds a significant real estate paradigm shift, necessitating all stakeholders’ adaptation and diligence.
NEI has observed more locations implementing buyer agency agreements in recent months. We increased counseling to buyers regarding these contracts with the early rulings on the NAR lawsuits and will continue to offer support to help avoid financial surprises at closing.
Longer term, we anticipate a need for companies to review their policies to determine any benefit changes as the impacts of these industry disruptions become clearer.
NEI continues to monitor the situation and will offer updates to our clients as they become available. Please get in touch with your NEI representative if you have any questions or want to discuss this further.
National Association of Realtors Lawsuit Update
On March 15, 2024, a significant development unfolded within the real estate industry as the National Association of REALTORS® (NAR) disclosed a comprehensive nationwide settlement addressing commission lawsuits initiated by sellers across various states. It is imperative to note that the settlement is not final; its final approval by the court is pending, and the court is unsure when this may happen.
The proposal includes two pivotal rule changes as part of this new settlement. Firstly, NAR has committed to implementing a new regulation prohibiting compensation offers on the MLS. With the rule change, brokers and agents must directly negotiate compensation terms with their respective clients. Secondly, agents must formalize written buyer agreements with potential buyers before facilitating property tours.
These proposed rule changes would take effect mid-July, marking a significant shift in industry practices.
Key Practice Changes:
- Consumers retain the right to opt for cooperative compensation, provided it is pursued off-MLS through negotiations and consultations with real estate professionals.
- A new rule barring compensation offers on the MLS will be enforced, effective mid-July 2024.
Implications:
- Despite the prohibition of communicating compensation offers through the MLS, various avenues for compensating buyer brokers will persist.
- Compensation for buyer brokers will remain diverse and subject to negotiation between brokers and consumers. Compensation may include fixed-fee commissions paid directly by consumers, seller concessions, or a portion of the listing broker’s compensation.
- Negotiating compensation terms between agents and the consumers they represent will remain paramount.
- The industry may see reduced listing commissions and buyers responsible for paying their own representative.
- With these rapid changes to the real estate sales process, it is more important than ever to work with highly trained and qualified relocation agents for both selling and buyer.
- This announcement heralds a significant real estate paradigm shift, necessitating all stakeholders’ adaptation and diligence.
NEI has observed more locations implementing buyer agency agreements in recent months. We increased counseling to buyers regarding these contracts with the early rulings on the NAR lawsuits and will continue to offer support to help avoid financial surprises at closing.
Longer term, we anticipate a need for companies to review their policies to determine any benefit changes as the impacts of these industry disruptions become clearer.
NEI continues to monitor the situation and will offer updates to our clients as they become available. Please get in touch with your NEI representative if you have any questions or want to discuss this further.
