1. Why did NAR enter into this settlement?

NAR entered into this settlement with two main goals in mind:

  • To secure a release of liability for as many of our members, associations, and MLSs as possible.

  • To preserve the choices consumers have regarding real estate services and compensation.

This proposed settlement successfully achieves both goals and allows us to continue our mission to protect and advance the right to real property for everyone.

2. What are the key terms of the agreement?

  • Release of Liability: The agreement releases NAR, over one million members, all state/territorial and local REALTOR® associations, all REALTOR® MLSs, and brokerages with an NAR member as principal (and a residential transaction volume in 2022 of $2 billion or below) from liability related to broker commissions.

  • Compensation Offers Moved Off MLS: Starting August 15, 2024, NAR will prohibit offers of compensation on MLS. Compensation offers can still be made off-MLS through negotiation.

  • Written Agreements for Buyers: From August 15, 2024, MLS Participants working with buyers must enter into written agreements with their clients before touring a home.

  • Settlement Payment: NAR will pay $418 million over approximately four years. This will not affect membership dues for 2024 or 2025.

  • NAR Denies Wrongdoing: NAR continues to believe that cooperative compensation and its current policies benefit buyers and sellers, particularly those in lower- and middle-income brackets.

3. What MLS policies have changed?

Key changes to MLS policies include:

  • Elimination of Compensation Offers: No more required offers of compensation on MLS.

  • Cooperation Definition: The concept of "cooperation" for MLS participation will be retained and defined.

    • Prohibition of Compensation Information on MLS: MLSs must remove all compensation fields and information.

    • No Non-MLS Compensation Mechanisms: MLSs must not support non-MLS platforms for offering compensation to buyer brokers.

  • No Filtering Based on Compensation: MLSs and Participants must not filter or restrict MLS listings based on compensation levels.


4. What is the value of an MLS?

MLSs continue to provide significant value beyond just facilitating compensation offers:

  • Enable Comprehensive Marketplaces: MLSs help create marketplaces with wide participation and reliable data access.

  • Create Connections: MLSs offer the largest opportunities for connecting agents with properties and clients.

  • Advance Small Business: MLSs help smaller brokerages compete with larger ones by providing accessible housing information.

  • Encourage Entrepreneurship: MLSs lower barriers to entry, fostering innovation in technology and services.

5. When will the practice changes take effect?

The mandatory MLS policy changes will take effect on August 15, 2024. This is also the earliest possible date for the required practice changes to be implemented, giving NAR members and MLSs a three-month window to prepare.

6. Why was prohibiting the publication of compensation offers on an MLS part of the settlement?

NAR believes that cooperative compensation benefits buyers and sellers but recognizes that continuing litigation would harm members. The prohibition of compensation offers on MLS is part of the settlement to avoid further legal issues, while still allowing for off-MLS compensation options.

7. How will buyer brokers get paid now?

Buyer brokers can still be compensated through several means, including:

  • Fixed-fee commissions paid by consumers

  • Seller concessions

  • A portion of the listing broker’s compensation

Compensation will remain negotiable and should be discussed between agents and their clients.

8. What should listing brokers advise their clients about the prohibition of offers of compensation on an MLS?

Listing brokers should inform clients that offers of compensation will no longer be available on an MLS. However, these offers can still be made off-MLS, and sellers can offer concessions like closing cost assistance.

9. What is NAR’s policy on steering buyers based on the amount of broker compensation?

NAR’s Code of Ethics prohibits steering buyers based on broker compensation. REALTORS® must prioritize their clients' interests over their own compensation and be honest and transparent about broker commissions.

10. Can a broker tell a potential buyer the amount of broker commissions and explain who is paying those commissions?

Yes, REALTORS® must provide this information under NAR’s Code of Ethics. Starting August 15, 2024, written buyer agreements will outline all compensation details, ensuring transparency.

11. Can a listing broker explain to a seller that the buyer will know who is paying the commissions?

Yes, listing brokers can and should explain this to sellers. They should also discuss the benefits and costs of different marketing strategies, including how buyers might react to these costs.

12. What additional provisions must be included in written listing agreements because of the practice changes?

MLS Participants working with sellers must disclose that broker commissions are fully negotiable and not set by law. This disclosure must be included in the listing agreement or a separate form if the listing agreement is government-specified.

13. Which pre-closing disclosure forms must include conspicuous disclosures about the negotiability of commissions?

Any pre-closing disclosure form related to broker representation must include or be accompanied by a statement that broker commissions are fully negotiable and not set by law.

14. What provisions must be included in written buyer agreements?

Written buyer agreements must include:

  • A specific disclosure of the amount or rate of compensation the broker will receive.

  • A prohibition on receiving compensation exceeding the agreed amount.

  • A statement that broker fees and commissions are fully negotiable and not set by law.

15. How does the settlement affect home sellers and home buyers?

The settlement preserves consumer choices in real estate services and compensation. After August 15, 2024, compensation offers must be negotiated off-MLS, and buyers must sign written agreements with their agents before touring homes.

16. What should a realtor tell home buyers and sellers they need to know about these changes?

After August 15, 2024:

  • Buyers must sign a written agreement with their agent before touring homes if the agent is using an MLS.

  • These agreements are required for both in-person and virtual tours.

  • Agent compensation remains fully negotiable, and consumers should ask questions about services and compensation when choosing an agent.