The NAR Settlement - what does it mean?

The NAR settlement agreement…what does it mean???

 We now know the WHAT, but the HOW will become more apparent as the new rules are implemented.


Broker commissions have ALWAYS been negotiable. Each brokerage office has had the ability to determine what rate they would work for. And the Buyers’ Agent Commission has, since the 1990s, been paid for by the seller at closing. The Multiple Listing Service (MLS) “cooperative compensation model” rule was introduced in the 1990s in response to calls from consumer protection advocates for buyer representation.

Although the buyer doesn't directly pay for their agent's services, commissions impact how much homes cost. Sellers may build in the cost of agent commissions when pricing their homes.


The lawsuits challenge The National Association of Realtors (NAR's) cooperative compensation rule, which requires seller's agents to make "blanket unilateral offers of compensation" to buyer's agents. To list a home on an MLS, the seller must make this "blanket unilateral" offer to pay buyer's agents, who influence which houses their clients consider.

Plaintiffs contend that the cooperative compensation rule extorts sellers into paying inflated commission to buyer's agents.


The Buyer Broker Commission will move off of the MLS. Offers of compensation will continue to be an option consumers can pursue off-MLS through negotiation and consultation with a REALTOR. We assume these rules will apply for real estate agents who are not members of NAR and therefore cannot use the Realtor designation.

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

Buyer Broker Agreements will be required.  While NAR has been advocating for the use of written agreements for years, in this settlement they have agreed to require MLS participants working with buyers to enter into written representation agreements with their buyers. 


The agreement states the new rules will go into effect in mid-July 2024.


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