You have a lot of questions, and NAR has provided a lot of resources. We hope this searchable format helps you navigate the information provided by NAR to answer any questions and concerns you may have about the NAR Settlement. If you would like to review the settlement and download the complete FAQs and Fact Sheets, please scroll to the bottom of this page.

QuestionAnswer
Why did NAR enter into this settlement?Since the litigation began, we have worked consistently to reach a resolution with the plaintiffs.
  • We have always wanted to reduce the significant strain on our members and provide a path forward for the industry and, from the beginning of this litigation, we had two goals:

    • Secure a release of liability for as many of our members, associations, and MLSs as we could; and

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

  • This proposed settlement achieves both of those goals and provides a path for us to move forward and continue our work to preserve, protect, and advance the right to real property for all.
What are the key terms of the agreement?
  • Release of liability: The agreement would release NAR, over one million NAR members, all state/territorial and local REALTOR® associations, all association-owned MLSs, and all brokerages with an NAR member as principal whose residential transaction volume in 2022 was $2 billion or below from liability for the types of claims brought in these cases on behalf of home sellers related to broker commissions.

    • NAR fought to include all members in the release and was able to ensure more than one million members are included

    • Despite NAR’s efforts, agents affiliated with HomeServices of America and its related companies—the last corporate defendant still litigating the Sitzer-Burnett case—are not released under the settlement, nor are employees of the remaining corporate defendants named in the cases covered by this settlement.

  • The agreement provides a mechanism for nearly all brokerage entities that had a residential transaction volume in 2022 that exceeded $2 billion and MLSs not wholly owned by REALTOR® associations to obtain releases efficiently if they choose to use it.

    • Compensation offers moved off the MLS: NAR has agreed to put in place a new rule prohibiting offers of compensation on the MLS. Offers of compensation could continue to be an option consumers can pursue off-MLS through negotiation and consultation with real estate professionals. And sellers can offer buyer concessions on an MLS (for example—concessions for buyer closing costs). This change will go into effect in mid-July 2024.

    • Written agreements for MLS participants acting for buyers: While NAR has been advocating for the use of written agreements for years, in this settlement we have agreed to require MLS participants working with buyers to enter into written agreements with their buyers. This change will go into effect in mid-July 2024.

    • Settlement payment: NAR would pay $418 million over approximately four years. This is a substantial sum, and it will be incumbent on NAR to use our remaining resources in the most effective way possible to continue delivering on 1 our core mission. NAR will not change membership dues for 2024 or 2025 because of this payment.

    • NAR continues to deny any wrongdoing: NAR has long maintained — and we continue to believe — that cooperative compensation and NAR’s current policies are good things that benefit buyers and sellers. They promote access to property ownership, particularly for lower- and middle-income buyers who can have a difficult-enough time saving for a down payment. With this settlement, NAR is confident it and its members can still achieve all those goals.


How do I know if I’m covered by the settlement?If you are an NAR member, you are covered by the settlement unless:
  • You are an employee of: At World Properties, LLC; Compass, Inc.; Douglas Elliman, Inc.; Douglas Elliman Realty, LLC; eXp Realty, LLC; eXp World Holdings, Inc.; Hanna Holdings, Inc.; HomeSmart International, LLC; Howard Hanna Real Estate Services; Keller Williams Realty, Inc.; Real Broker, LLC; The Real Brokerage, Inc.; Realogy Holdings Corp.; Realty ONE Group, Inc.; Redfin Corporation; RE/MAX, LLC; United Real Estate; or Weichert, Realtors® OR

  • You are associated with HomeServices of America or one of its affiliates.

Brokerages with an NAR member as principal whose residential transaction volume in 2022 was $2+ billion are not covered by the release. What about members affiliated with those brokerages?With the exception of members affiliated with HomeServices of America and employees of the remaining corporate defendants named in the cases covered by this settlement, members affiliated with brokerages with an NAR member as principal whose transaction volume in 2022 was $2+ billion are covered by the release.
Does this settlement mean that NAR is admitting that plaintiffs’ allegations are true?
  • No. The settlement makes clear that NAR continues to deny any wrongdoing in connection with the Multiple Listing Service (MLS) cooperative compensation model rule (MLS Model Rule).

  • It has always been NAR’s goal to resolve this litigation in a way that preserves consumer choice and protects our members to the greatest extent possible. This settlement achieves both of those goals.

  • This agreement significantly reduces liability nationwide for over one million NAR members, all state/territorial and local REALTOR® associations, association-owned MLSs, and all brokerages with an NAR member as principal that had a residential transaction volume in 2022 of $2 billion or below. Ultimately, continuing to litigate would have hurt members and their small businesses.

  • The agreement provides a path forward for our industry and NAR.
What if an agent has different releases under the settlement (e.g., moved between brokerages?) Are they covered by the release in this settlement agreement?The release covers most NAR members for the entire time period, and even if an agent is not covered for some of the time period, they may be covered for others for the time they were not affiliated with HomeServices and its related companies.
By changing the cooperative compensation policy, aren’t you admitting that it was problematic?
  • No. The settlement makes clear that NAR continues to deny any wrongdoing in connection with the Multiple Listing Service (MLS) cooperative compensation model rule (MLS Model Rule).

  • NAR has long maintained — and we continue to believe — that cooperative compensation and NAR’s current policies are good things that benefit buyers and sellers. They promote access to real property ownership, particularly for lower- and middle-income buyers who can have a difficult-enough time saving for a down payment. Real estate laws in many states authorize offers of compensation.

  • With this settlement, NAR is confident it and its members can still achieve all those goals.
Is it possible for offers of compensation to be conveyed through channels other than the MLS?Yes. Offers of compensation could continue to be an option consumers can pursue off-MLS through negotiation and consultation with real estate professionals. And sellers can offer buyer concessions on an MLS (for example—concessions for buyer closing costs).
Will this prohibition save money for sellers or buyers?
  • As NAR has maintained throughout the litigation, nothing in NAR’s current policies (including the MLS Model Rule) has increased costs for buyers or sellers.

  • This settlement would preserve the choices consumers have regarding real estate services and compensation. After the new rule goes into effect, listing brokers and sellers could continue to offer compensation for buyer broker services, but such offers could not be communicated via the MLS.

  • The settlement expressly provides that sellers may communicate seller concessions — such as buyer closing costs — via the MLS provided that such concessions are not conditioned on the use of or payment to a buyer broker.
How does the settlement affect MLSs?
  • The agreement would release association-owned MLSs from liability for the types of claims brought in these cases on behalf of home sellers related to broker commissions.

  • While the release excludes MLSs that are not wholly owned by REALTOR® associations, the agreement provides a mechanism for those MLSs to obtain releases efficiently if they choose to use it.

  • This mechanism includes opting into the MLS practice changes that are a part of the agreement and paying a per-subscriber fee to the Settlement Fund.

  • NAR has agreed to put in place a new rule prohibiting offers of compensation on the MLS. This change will go into effect in mid-July 2024.

  • Additionally, we have agreed to require MLS participants working with buyers to enter into written agreements with their buyers. This change will also go into effect in mid-July 2024.
How does the settlement affect home sellers and home buyers?This settlement would preserve the choices consumers have regarding real estate services and compensation.
  • After the new rule goes into effect, listing brokers and sellers could continue to offer compensation for buyer broker services, but such offers could not be communicated via the MLS.

  • MLS participants acting for buyers would be required to enter into written agreements with their buyers before touring a home. These agreements can help consumers understand exactly what services and value will be provided, and for how much.
How does the settlement affect corporate brokerages and any brokerages that are carved out from the release?
  • The agreement provides a mechanism for nearly all brokerage entities that had a residential transaction volume in 2022 that exceeded $2 billion and MLSs not wholly owned by REALTOR® associations to obtain releases efficiently if they choose to use it.

  • While we would have preferred to protect all industry players, ultimately NAR could not persuade the plaintiffs to include the largest brokerages, particularly given the significant settlements that other corporate defendants have already reached.
How will buyer brokers get paid now?
  • We have long believed that it is in the interests of the sellers, buyers, and their brokers to make offers of compensation — but using the MLS to communicate offers of compensation would no longer be an option.

  • Offers of compensation could continue to be an option consumers can pursue offMLS through negotiation and consultation with real estate professionals.

  • The types of compensation available for buyer brokers would continue to take multiple forms, depending on broker-consumer negotiations, including but not limited to:

    • Fixed-fee commission paid directly by consumers

    • Concession from the seller

    • Portion of the listing broker’s compensation

  • Compensation would continue to be negotiable and should always be negotiated between agents and the consumers they serve.
Why does the release of liability carve out some co-defendants and some of their affiliated agents?
  • NAR fought to include all members in the release and was able to ensure more than one million members were included.

  • Despite NAR’s efforts, agents affiliated with HomeServices of America and its related companies—the last corporate defendant still litigating the Sitzer-Burnett case—are not released under the settlement, nor are employees of the remaining corporate defendants named in the cases covered by this settlement.

  • Plaintiffs would not agree to include these members and employees of the corporate defendants in the NAR’s release

  • NAR secured in the agreement a mechanism for nearly all brokerage entities that had a residential transaction volume in 2022 that exceeded $2 billion and MLSs not wholly owned by REALTOR® associations to obtain releases efficiently if they choose to use it.
How will NAR fund the settlement?
  • One of the critical advantages of this agreement is that NAR would be able to pay the settlement amount over time.

  • We will determine how to allocate funds as they become due, working closely with our Finance Committee.
How does this settlement change NAR’s value proposition? Why should real estate professionals continue to be NAR members after this news?
  • We are confident that this agreement provides a path for NAR to move forward and continue our work to preserve, protect, and advance the right to real property for all.

  • NAR fought to include all members in the release and was able to ensure more than one million members were included.

  • We will continue to deliver unparalleled value to, and advocacy on behalf of, REALTORS®, including through our learning opportunities and resources, research, and member tools.
What is the value of an MLS?MLSs have always provided significant value beyond communicating offers of compensation.

MLSs:
  • Enable comprehensive marketplaces: Access to inventory and widespread advertising incentivizes local broker participation.

  • Ensure reliable data access: NAR guidelines for local MLS broker marketplaces enable hubs of trusted, verified information where all participants have equitable access.

  • Create connections: Local MLS broker marketplaces create the largest opportunity for connections between real estate agents with properties to sell and those with clients looking to buy.

  • Advance small business: Compiling housing information that is accessible to all businesses, in one place, allows smaller real estate brokerages to compete with larger ones.

  • Encourage entrepreneurship: Because of lower barriers to entry enabled by local MLS broker marketplaces, new market entrants can advance technology, consumer service and other innovations.
What should listing brokers advise their clients about the prohibition of offers of compensation on an MLS?
  • Listing brokers should inform their clients that offers of compensation would no longer be an option on an MLS.

  • This change will not prevent offers of cooperative compensation off an MLS. And it will not prevent sellers from offering buyer concessions on an MLS (for example – concessions for buyer closing costs).

  • Compensation would continue to be negotiable and should always be negotiated between agents and the consumers they serve.
Who at NAR signed off on the settlement and was the decision to settle subject to proper NAR governance procedures?
  • The settlement was signed off by NAR’s Leadership Team, in consultation with outside legal and financial experts, and in accordance with NAR’s governance procedures.

  • Throughout the settlement process, we engaged with a diverse range of members and considered their perspectives and interests while fighting to protect all industry players as best we could.

  • As is common in negotiating a complex settlement, there is a need to maintain confidentiality and effectively navigate complex legal considerations, which restricted the extent of the information that NAR could share more broadly.
Why was prohibiting the publication of compensation offers in the MLS part of the settlement?
  • While NAR has long maintained — and we continue to believe — that cooperative compensation and NAR’s current policies are good things that benefit buyers and sellers, we also acknowledge that continuing to litigate would have hurt members and their small businesses, so have agreed to put in place a new rule prohibiting offers of compensation on the MLS.

  • This is consistent with NAR’s long-maintained position that prohibiting all offers of cooperative compensation entirely would harm consumers and be inconsistent with real estate laws in the many states that authorize them.

  • We believe this agreement provides a path forward for our industry and NAR.
Is it possible for offers of compensation to be conveyed through channels other than the MLS?Yes. Offers of compensation could continue to be an option consumers can pursue off-MLS through negotiation and consultation with real estate professionals. And sellers can offer buyer concessions on an MLS.
How does the settlement affect state/territorial and local associations?The agreement would release all state/territorial and local REALTOR® associations from liability for the types of claims brought in these cases on behalf of home sellers related to broker commissions, and would also require their compliance with the practice changes agreed to in the settlement.
Are institutes, societies, and councils affiliated with NAR included in the release in the settlement agreement?Yes.
Do association-owned MLSs need to do anything to be covered by the release?
  • Yes. Association-owned MLSs need to execute an appendix to the agreement in which they agree to abide by the practice changes in the agreement.

  • They will have 60 days to execute the appendix.
How will offers of compensation be communicated if brokers can’t use MLSs? Doesn’t this just make broker compensation less transparent?
  • Offers of compensation could continue to be an option consumers can pursue off-MLS through negotiation and consultation with real estate professionals. And sellers can offer buyer concessions on an MLS (for example—concessions that can be used for buyer closing costs).

  • The settlement does not change the ethical duties that NAR members owe their clients.

  • REALTORS® are always required to protect and promote the interests of their clients and treat all parties in a transaction, honestly (Article 1, COE).

  • NAR members will continue to use their skill, care, and diligence to protect the interests of their clients.

  • NAR remains dedicated to promoting transparency in the marketplace and working to ensure that consumers have access to comprehensive, equitable, transparent, and reliable property information, as well as the ability to have affordable professional representation in their real estate transactions.
How quickly do you expect the settlement to be reviewed and/or approved by the court?
  • We can expect the process of court review to take several months or more.

  • There are strong grounds for the court to approve this settlement because it is in the best interests of all parties and class members.
What were the key factors that influenced NAR’s decision to choose the legal path it did for the settlement?
  • NAR explored settling throughout the litigation and also carefully considered the other legal options available to us. These included:

    • Appealing: A win on appeal would only have addressed the verdict in the Sitzer-Burnett case (not any of the copycat cases) and may only have resulted in a new jury trial, leaving members and consumers with continued uncertainty.

    • Chapter 11 reorganization: In theory, Chapter 11 would have enabled NAR to eliminate its own liabilities while pursuing an appeal of the Sitzer-Burnett verdict. But we believe that would have left members with continued uncertainty and potential liability risk. Chapter 11 would also have paused the litigation against NAR but not the other defendants in the cooperative compensation cases.

  • Ultimately, while NAR continues to believe that it is not liable for the home seller claims related to broker commissions and that we have strong arguments challenging the Sitzer-Burnett verdict, we decided to reach this settlement to put claims to rest for over one million NAR members and other parties who would be released under the agreement.
In what ways did NAR attempt to include all members in the settlement process, and what were the limitations?
  • Throughout the settlement process, we engaged with a diverse range of members and considered their perspectives and interests while fighting to protect all industry players as best we could.

  • As is common in negotiating a complex settlement, there is a need to maintain confidentiality and effectively navigate complex legal considerations, which restricted the extent of the information that NAR could share more broadly.
What was NAR’s overarching strategy with the settlement and why did NAR choose to not more actively advocate for its position in the public domain during the legal negotiations?
  • Since the litigation began, we have consistently worked to reach a resolution with the plaintiffs.

  • In the months since the Sitzer-Burnett verdict, we redoubled those efforts.

  • As is common in negotiating a complex settlement, there is a need to maintain confidentiality and effectively navigate complex legal considerations, which restricted the extent of the information that NAR could share more broadly.

  • We have always wanted to reduce the significant strain on our members and provide a path forward for the industry and, from the beginning of this litigation, we had two goals:

    • Secure a release of liability for as many of our members, associations, and MLSs as we could; and

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

  • This proposed settlement achieves both of those goals and provides a path for us to move forward and continue our work to preserve, protect, and advance the right to real property for all.

  • Ultimately, while NAR continues to believe that it is not liable for the home seller claims related to broker commissions and that we have strong arguments challenging the Sitzer-Burnett verdict, we decided to reach this settlement to put claims to rest for over one million NAR members and other parties who would be released under the agreement.

  • NAR has been proactive in publicly advocating our position throughout the litigation. We have published multiple op-eds and provided our perspective to various news outlets reporting on NAR and the challenges our industry faces.

  • We have also consistently updated Competition.Realtor—our online hub of information about how REALTORS® and local MLS broker marketplaces create competitive, efficient, pro-consumer markets—with new information, materials, and FAQs pertinent to the litigation.
Why is NAR paying so much more to settle than the corporate defendants did?
  • This settlement was heavily negotiated and is based on NAR’s ability to pay.

  • NAR has secured a release of liability for over one million NAR members, all state/territorial and local REALTOR® associations, all association-owned MLSs, and all brokerages with an NAR member as principal that had a residential transaction volume in 2022 of $2 billion or below.

  • There are strong grounds for the court to approve this settlement because it is in the best interests of all parties and class members.

Does the settlement affect NAR’s ability to continue operating?
  • We are confident that this agreement provides a path for us to move forward and continue our work to preserve, protect, and advance the right to real property for all.

  • The settlement amount is a substantial sum, and it will be incumbent on NAR to use our remaining resources in the most effective way possible to continue delivering on our core mission.

  • The Finance Committee and Strategic Planning Committee will remain critical in reviewing and providing guidance about NAR’s operating budget to help ensure we will continue to deliver unparalleled value to and advocacy on behalf of REALTORS®, including through our learning opportunities and resources, research, and member tools.
Can NAR use reserves to pay for the settlement? If so, how much?
  • This settlement was heavily negotiated, and the amount is based on NAR’s ability to pay.

  • One of the critical advantages of this agreement is that NAR would be able to pay the settlement amount over time.

  • We will determine how to allocate funds as they become due, working closely with our Finance Committee.
What does this settlement mean for NAR advocacy efforts? Is there still funding available for those efforts?
  • One of the critical advantages of this agreement is that NAR would be able to pay the settlement amount over time.

  • The settlement amount is a substantial sum, and it will be incumbent on NAR to use our remaining resources in the most effective way possible to continue delivering on our core mission.

  • The Finance Committee and Strategic Planning Committee will remain critical in reviewing and providing guidance about NAR’s operating budget to help ensure we will continue to deliver unparalleled value to, and advocacy on behalf of, REALTORS®, including through our learning opportunities and resources, research, and member tools.
Will NAR raise dues or levy an assessment on members to fund the settlement?NAR will not change membership dues for 2024 or 2025 because of this payment.
Are independent MLSs affected by the prohibition of publishing compensation offers on the MLS?Independent MLSs are not required to prohibit offers of compensation on the MLS pursuant to the agreement unless they choose to opt into the settlement, in which case they will need to agree to the practice changes in the agreement and pay a persubscriber fee to the Settlement Fund.
Does this prohibition affect the compensation amount paid to the listing broker?Compensation would continue to be negotiable and should always be negotiated between agents and the consumers they represent.
How does this affect the existing listing agreements that authorize an offer of compensation to be made in the MLS?
  • After the new rule goes into effect, listing agreements should be amended to reflect that offers of compensation cannot be communicated via the MLS.

  • The settlement expressly provides that sellers may communicate seller concessions — such as buyer closing costs — via the MLS provided that such concessions are not conditioned on the use of or payment to a buyer broker.
How would this prohibition affect pending transactions?The practice changes will go into effect in mid-July 2024.
What steps will buyers’ agents need to take to ensure they are being paid for their services?
  • NAR has long encouraged its members to use written agreements because they help consumers understand exactly what services and value will be provided, and for how much.

  • In fact, the settlement provides that MLS participants working with buyers must enter into written agreements with those buyers before touring a home.

  • These agreements can help consumers understand exactly what services and value will be provided, and for how much.

  • The types of compensation available for buyer brokers would continue to take multiple forms, including but not limited to:

    • Fixed-fee commission paid directly by consumers

    • Concession from the seller

    • Portion of the listing broker’s compensation

  • Compensation would continue to be negotiable and should always be negotiated between agents and the consumers they represent.
Does this mean buyers won’t have to use a buyer broker to purchase a property?As always, the consumer chooses whether to use a real estate professional. Research has confirmed that consumers find great value in the services provided by a buyer broker, and we continue to believe it is imperative for buyer brokers to clearly articulate what services and value they are providing to consumers.
Can a buyer request the listing broker to pay compensation to the buyer broker?
  • Offers of compensation could continue to be an option consumers can pursue off-MLS through negotiation and consultation with real estate professionals. And sellers can offer buyer concessions on an MLS (for example—concessions for buyer closing costs).

  • Compensation would continue to be negotiable and should always be negotiated between agents and the consumers they serve.
What is the mechanism for brokerages with residential transaction volume in 2022 that exceeded $2 billion to obtain releases?
  • NAR secured in the agreement a mechanism for nearly all brokerage entities that had a residential transaction volume in 2022 that exceeded $2 billion to obtain releases efficiently if they choose to use it. However, the remaining defendants in the actions covered by the Agreement cannot use the opt-in mechanism.

  • Broadly speaking, the opt-in provides two paths:

    • Option 1: A brokerage can elect to pay an amount based on a predetermined formula based on that brokerage’s residential transaction volume.

    • Option 2: A brokerage can elect to participate in non-binding mediation within 110 days following preliminary approval of the settlement.

    • Brokerages can also choose not to participate in this settlement.

  • All agreements reached through this mechanism would be subject to court approval.
What is the mechanism for non-association MLSs to obtain releases?
  • For MLSs that are not wholly owned by a REALTOR® association, the agreement includes a mechanism to obtain a release efficiently if they so choose.

  • Broadly speaking, the agreement provides two paths:

    • Option 1: The MLS can elect to pay an amount based on a pre-determined formula based on number of MLS subscribers.

    • Option 2: The MLS can elect to participate in non-binding mediation within 110 days following preliminary approval of the settlement.

  • Under both options, participating non-association MLSs would agree to be bound by the practice changes set forth in the settlement agreement, including and not limited to the adoption of a rule prohibiting offers of compensation on that MLS.

  • Non-association MLSs can also choose not to participate in this settlement.
Does the fact that the release does not cover everybody mean that NAR has left large corporate brokerages and affiliated agents to fend for themselves?
  • Absolutely not.

  • NAR fought to include as many people and companies in the release as possible and achieved a release for everyone it could. Over one million members are covered, as are tens of thousands of REALTOR® businesses.

  • The scope of the release makes clear that NAR looked out for its members. Ultimately, NAR was able to ensure that agents, even those at brokerages that are not covered, are among the more than one million members released.

  • But, despite NAR’s efforts, plaintiffs would not agree to include everybody.

  • Those that are not released—the largest companies in our industry—are no worse off now than they were before the settlement.

  • In fact, many are better off, as thousands of their independent contractor real estate agents are released by the settlement.

  • They can choose whether or not to use the mechanism NAR negotiated.

  • Our options included reaching a settlement – whose terms were always going to be affected by the large settlements reached by other corporate defendants – or continuing to appeal the Sitzer-Burnett verdict and litigate the related cases.

  • That second option likely would have resulted in our filing for Chapter 11 protection, leaving all members, associations, MLSs, and brokerages exposed.
How would the prohibition of offers of compensation on the MLS affect pending transactions/current deals?
  • The practice changes will go into effect in mid-July 2024.

  • Until the practices changes go into effect, offers of compensation are still permitted on the MLS.
Doesn’t moving offers of compensation off-MLS introduce friction into the homebuying process? What happens if a buyer broker can’t get timely information from a listing broker about offers of compensation?
  • This will be a time of adjustment, but real estate professionals have adjusted to change many times over the years.

  • The settlement does not change the ethical duties that NAR members owe their clients.

  • REALTORS® are always required to protect and promote the interests of their clients and treat all parties in a transaction honestly (Article 1, COE).

  • NAR members will continue to use their skill, care, and diligence to protect the interests of their clients.
Wasn’t the purpose of publishing offers of compensation on the MLS to promote transparency? Doesn’t moving offers of compensation off-MLS reduce transparency?NAR remains dedicated to bolstering transparency in the marketplace and working to ensure that consumers receive comprehensive, equitable, transparent, and reliable property information, as well as the ability to have affordable professional representation in their transactions.
Won’t prohibiting offers of compensation on the MLS raise fair housing issues?
  • This settlement allows compensation to remain a choice for consumers when buying or selling a home.

  • NAR continues to believe that offers of compensation help make professional representation more accessible, decrease costs for home buyers to secure these services, increase fair housing opportunities, and increase the potential buyer pool for sellers.

  • The settlement does not change the ethical duties that NAR members owe their clients.

  • REALTORS® are always required to protect and promote the interests of their clients and treat all parties in a transaction honestly (Article 1, COE).

  • NAR members will continue to use their skill, care, and diligence to protect the interests of their clients.
If my MLS removes the compensation field, can I choose to publish my cooperative commission offer in the agent remarks?No. The new rule would prohibit offers of compensation on the MLS.
How long until the offer of compensation field needs to be removed from MLSs?The practice changes will go into effect in mid-July 2024.
Does this prohibition affect the compensation amount paid to the listing broker?Compensation would continue to be negotiable and should always be negotiated between agents and the consumers they represent, as NAR’s policy has required for decades.
Does this mean buyer brokers may have to work for free?
  • No. We have long believed that it is in the interest of the sellers, buyers, and their brokers to make offers of compensation — but using the MLS to communicate offers of compensation would no longer be an option.

  • The types of compensation available for buyer brokers would continue to take multiple forms, including but not limited to:

    • Fixed-fee commission paid directly by consumers

    • Concession from the seller

    • Portion of the listing broker’s compensation

    • Compensation would continue to be negotiable and should always be negotiated between agents and the consumers they represent.
Can a buyer request the listing broker to pay compensation to the buyer broker?Yes.
People are saying this settlement is going to fundamentally change the way we
buy and sell our homes. What does the future of real estate look like now?
  • There will be some changes, but what will remain is that members of NAR will
    continue to lend their expertise in helping consumers—both buyers and sellers—
    navigate what could be the most significant transaction of their lives.

  • Buyers and sellers will continue to be guided by NAR members’ skill, care, and diligence during the process of buying or selling a home.
People are saying that this agreement means that NAR agreed to decrease
commissions. Is that right?
  • No. To be clear, NAR does not set commissions. They are and will remain entirely
    negotiable between agents and their clients.

  • The rule that has been the subject of litigation requires only that listing brokers communicate an offer of compensation. That offer can be any amount, including
    zero.

  • NAR has agreed to put in place a new MLS rule prohibiting offers of broker compensation on the MLS.

  • NAR issued a press release to clarify this point: https://www.nar.realtor/newsroom/correcting-the-record-nar-does-not-set-commissions
How will consumers’ conversations with REALTORS® be different now?
  • NAR has long encouraged its members to use written agreements because they help consumers understand exactly what services and value will be provided.

  • Now, as part of the settlement, NAR has agreed to implement a rule mandating
    written representation agreements with buyers.

  • Real estate professionals across the country will continue to work closely with their
    clients and help Americans freely buy, sell, lease, and transfer real property.

  • State law predicates a lot of things, so there will be variations depending on where
    you are.
What is going to be different when working with sellers?
  • NAR members will continue to have conversations to help sellers understand what
    services and value will be provided. We are already having these conversations with
    consumers every day and that will continue.

  • As part of the settlement, NAR has agreed to prohibit offers of compensation on the
    MLS, so that will be different.

  • Consumers will consult with their agents and will have the option to communicate
    offers of compensation off the MLS, if they choose.
Bottom line — will this settlement make it easier for people to buy homes?
  • While there are going to be changes to the process, real estate professionals will
    continue to help consumers with navigating these complex and significant
    transactions.

  • The market drives the affordability crisis, and until we address the historic lack of
    inventory and supply in communities across the country, the dream of
    homeownership will remain out of reach for millions of middle-class Americans.
Will buyers forgo agents altogether?
  • While there will be some changes to the real estate process, consumers will still
    have the choice to engage a professional who will help represent them in what may
    be the largest transaction of their lives.

  • From helping them navigate a maze of complex paperwork to coordinating
    inspections and interpreting the information they find online, real estate professionals
    are there for the consumer every step of the way.
I think the question everyone wants to know is will this finally lower housing costs
after several years of prices that are out of reach for many?
  • Real estate agent commissions are driven by the market and are not the cause of
    the affordability crisis.

  • Until we address the historic lack of inventory and supply in communities across the
    country, the dream of homeownership will remain out of reach for millions of middle-
    class Americans.
What are interested party contributions?Fannie Mae, Freddie Mac, and the FHA specify limits on how much a seller or broker can contribute to the buyer to pay for services typically paid by the buyer. These payments are called interested party contributions (IPCs).
Is compensation paid by a seller or listing broker to a buyer broker considered an IPC?No. The agencies exclude fees “traditionally” or “customarily” paid by the seller from the IPCs.
Does the recently announced NAR settlement change that? Is compensation paid by a seller or listing broker to a buyer broker now an IPC?
  • The settlement would preserve the choices consumers have regarding real estate services and compensation. After the new rule goes into effect, listing brokers and sellers could continue to offer compensation for buyer broker services, but such offers could not be communicated via the MLS.

  • Based on our interpretation of current guidance that Fannie Mae, Freddie Mac, and FHA provide on this point, we do not expect compensation paid by a seller or listing broker to a buyer broker to become an IPC.

  • NAR is working to get verification on this point.
So does the settlement change access to mortgages for buyers?
  • No. Under the settlement, buyers still have the same options when it comes to compensating their real estate representatives. That is, the listing brokers can compensate the buyer broker, the seller can compensate the buyer broker, or the buyer can compensate their broker directly.

  • Based on our interpretation of current guidance, buyers should still be able to get financing from Fannie Mae, Freddie Mac, and the FHA under these scenarios.

  • NAR is working to verify that this interpretation will hold. However, none of these agencies will allow the buyer to finance a commission into the mortgage at this time.
What about VA loans and the prohibition on buyers paying commissions directly?NAR recently submitted a letter to the Department of Veterans Affairs (VA) urging them to revise its policies pertaining to fees veterans cannot pay when using their VA home loan benefit. NAR specifically calls on the VA to allow their buyers to compensate their representative directly, which is currently prohibited under their policies.
The letter stresses the importance of
professional representation for veterans in the purchasing process, and outlines the potential consequences for VA buyers in situations where compensation is not offered from a seller. NAR wants to ensure veterans maintain their access to the VA home loan program, which has been a significant tool in helping service members achieve the American dream of homeownership, and we remain committed to working with the department to create solutions for those who served out country.
Can real estate commissions be financed?
  • Financing commissions is not feasible under the current structure of the residential mortgage finance system, and there is no clear short-term legislative or regulatory fix.

  • Banks would treat such a loan as a personal loan that would have higher rates and they would limit access to those loans to borrowers with better credit profiles. Furthermore, that personal loan would add to the buyers' liabilities and make it harder to qualify for the mortgage they are seeking.

  • Fannie Mae, Freddie Mac, and FHA do not allow commissions to be added to the balance of the mortgage. Simply put, investors will only lend against the asset they can take back and sell in a foreclosure. An investor would not be able to take back and sell the commission for a service like real estate brokerage.

  • Finally, there are significant limits to adding commissions to the mortgage rate. Several rules that make up the foundation of mortgage finance would need to be changed by the regulators and Congress. Those rules took years to develop, implement, and refine, and changing them could take years, potentially a decade or more.
What is NAR doing to promote access to financing for home buyers?
  • As noted above, IPCs do not currently affect the availability of financing and that is not expected to change.

  • NAR is working with our partners in the lending community to gain greater clarity on guidance from the agencies and to maintain the steady flow of funding for closing home purchases.

  • NAR also continues to advocate for policies that could benefit potential homebuyers and expand opportunities for Americans to achieve homeownership.
Who will be responsible for enforcing the written agreements and ensuring all parties follow this new practice change?The MLS will be responsible for enforcing the rule regarding written agreements, similar to how the MLS enforces other existing rules.
Will written agreements be needed for walk-in viewings (e.g., office or open houses)?NAR staff will work with the MLS advisory board and professional standards committee advisory board to draft the new rule requiring written buyer agreements. The rule will provide more clarity about what this change will look like in practice. When the new rules roll out – and on an ongoing basis – NAR will continue to provide guidance and training in line with industry best practice to help members adapt to the changes to come.
What do these practice changes mean for commercial practitioners?The proposed settlement agreement – like the Sitzer-Burnett lawsuit and the copycat lawsuits – is focused on residential real estate transactions. That means most commercial transactions will not be affected. In many markets, commercial listings appear in commercial information exchanges (CIEs) and not multiple listing services (MLSs), and do not include an offer of compensation. The settlement prohibits offers of compensation on an MLS and requires MLS participants working with buyers to enter into written agreements with their buyers. These practice changes will go into effect around late July.

Download the Fact Sheet, FAQs, and other NAR Settlement Resources:

Fact Sheets 

Read the details of NAR’s action.

Fact Sheet
Get the Toolkit

FAQs

Download Frequently Asked Questions about the settlement from NAR for NAR members.

Litigation FAQ
Financing FAQ

Settlement Agreement

Legal Documentation of the Settlement.

The Agreement
Statement Overview
Settlement Timeline