What the NAR Settlement Means for Buyer and Sellers

The recent settlement with the National Association of REALTORS® (NAR®), effective August 17th, has led to several changes that benefit buyers and sellers, including how broker compensations are handled. 

BUYERS:

You will sign a buyer agreement with your agent before touring a home. The buyer agreement will spell out exactly what services will be provided and how much they will cost.

Buyer agreements will include four items related to agent compensation:

• They will clearly define the dollar amount or percentage of compensation and who is responsible for paying.
• Compensation cannot be open-ended (for example, buyer agreements should not include statements like, "Buyer broker compensation shall match the amount the seller is offering to the buyer").
• Agents cannot receive compensation from other sources without the buyer's knowledge.
• They will include a clear and conspicuous statement that agent commissions are negotiable and not set by law.

In addition, be aware that:

• Written agreements apply to both in-person and live virtual home tours.
• You do not need a written agreement if you are just speaking to an agent at an open house, interviewing agents or asking them about their services.
• The seller may agree to offer compensation to your agent. This practice is permitted but the offer cannot be posted on a Multiple Listing Service (MLS). The MLS is used by both buyer and seller agents and is intended only to share information about properties for sale.
• You can still accept concessions from the seller, such as offers to pay your closing costs.

Here's what doesn't change:

• Agents continue to be ethically obligated to work in your best interest while helping you navigate the homebuying process. As members of NAR, WK Real Estate agents abide by the REALTOR® Code of Ethics and will continue to have clear, transparent discussions with you about compensation and the services you are receiving.
• As always, your WK Real Estate agent will help you understand the full range of choices that are available to you when buying a home. We'll help you make the best decision for you.

SELLERS

Here's what you need to know:

• You can still offer compensation to buyer agents as a way to market your home or make your listing more attractive to buyers.
• Your agent must disclose their compensation clearly and conspicuously and obtain approval for any payment to another agent acting for buyers.
• This disclosure must be made in writing in advance of any payment or agreement to pay and must specify the amount or rate.
• If you choose to approve an offer of compensation, there are changes to how this can happen.
• As the seller, you can still make an offer of compensation but your agent cannot include the offer on a Multiple Listing Service (MLS). The MLS is used by both buyer and seller agents and is intended only to share information about properties for sale.
• Your agent can advertise your listing via non-MLS platforms such as social media, flyers and certain websites.
• You can still offer seller concessions on an MLS (for example, concessions for buyer closing costs).

Here's what doesn't change:

• Compensation for your agent remains fully negotiable, and your agent continues to be ethically obligated to work in your best interest while helping you navigate the process of selling your home. As members of NAR, WK Real Estate agents are bound by the REALTOR® Code of Ethics and will continue to have clear, transparent discussions with you about compensation and the services you're receiving.