Key Points of the NAR Settlement Agreement
- Broad Coverage: The settlement class is expansive, including home sellers who listed properties on MLSs anywhere in the U.S. during specified date ranges and paid a commission to any brokerage. For the St. Louis region, sellers are covered if they sold homes between October 31, 2018, and the date of the official Class Notice.
- Released Parties: The settlement releases a wide range of parties from future claims related to broker commissions, including NAR, REALTOR associations, and MLSs that adhere to the required practice changes. Brokerages with 2022 transaction volumes under $2 billion are also released if they comply with the new rules.
- Practice Changes: The agreement mandates significant shifts in industry practices, including:
- “eliminate and prohibit any requirement by the National Association of REALTORS®, REALTOR® MLS, or Member Boards that listing brokers or sellers must make offers of compensation to buyer brokers or other buyer representatives (either directly or through buyers), and eliminate and prohibit any requirement that such offers, if made, must be blanket, unconditional, or unilateral;”
- “prohibit REALTOR® MLS Participants, subscribers, other real estate brokers, other real estate agents, and their sellers from (a) making offers of compensation on the MLS to buyer brokers or other buyer representatives (either directly or through buyers) or (b) requiring that offers of compensation be made on the MLS to buyer brokers or other buyer representatives (either directly or through buyers);”
- “require that REALTOR® MLS Participants who work with buyers enter into written agreements with their buyer clients that specify the broker compensation and how it will be paid, including if it will be paid by the buyer;”
- “require that REALTOR® MLSs and REALTOR® MLS Participants provide, with any MLS listings that include a listing broker’s offer of compensation to a buyer broker or other buyer representative (either directly or through buyers), (i) disclosure as to the amount of that offer of compensation and (ii) a searchable field that displays buyer broker compensation offers;”
- “prohibit REALTOR® MLSs, REALTOR® MLS Participants, and REALTOR® Member Boards from taking any adverse action against any Person making offers of compensation to buyer brokers at any price, or no price, either on or off the MLS;”
- Financial Payout: NAR will pay a total of $418 million over four years to resolve the claims, with the first payment of $5 million due within 30 days of preliminary approval of the settlement. What This Means for St. Louis
What This Means for St. Louis
For homeowners in the St. Louis area, this settlement could bring more transparency to the commission structure when selling a home. By removing the requirement for listing brokers to offer buyer broker compensation through the MLS, the agreement aims to give sellers more control over how commissions are negotiated and paid.
Real estate agents and brokerages in our region will need to adapt to these changes, focusing on educating clients about compensation options and ensuring compliance with the new rules. At MORE, REALTORS®, we’ve been preparing for these shifts and are ready to guide our clients through the evolving landscape.
The full text of the NAR settlement agreement can be found below. As always, I’ll continue to keep you informed about how these developments impact our local market.
The Proposed NAR Settlement Agreement
(click on image to view entire agreement)
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