NAR SETTLEMENT FAQ

Frequently Asked Questions for the NAR Settlement

This section will address frequently asked questions regarding the NAR Settlement, providing clarity on its implications for real estate practices and the broader industry. The NAR Settlement, which involves a significant financial agreement and changes to commission structures, raises various inquiries from real estate professionals and consumers alike. Here, we will cover key aspects of the settlement, including its purpose, the changes it mandates, and how it affects members and consumers in the real estate market. Whether you are a REALTOR®, a buyer, or a seller, these FAQs aim to enhance understanding and inform decision-making in light of the new regulations.

What is the purpose of the NAR settlement?

The NAR settlement aims to achieve two primary goals: secure liability release for as many members, associations, and MLSs as possible, and preserve consumer choices regarding real estate services and compensation.

Who is covered by the settlement?

The settlement covers over one million NAR members, all state/territorial and local REALTOR® associations, all REALTOR® MLSs, and brokerages with an NAR member as principal whose residential transaction volume in 2022 was $2 billion or below.

What are the key changes resulting from the settlement?

The settlement introduces two major changes:

Compensation offers will be moved off MLS, prohibiting offers of compensation on an MLS starting August 17, 2024.
MLS Participants working with buyers must enter into written agreements before touring a home, effective August 17, 2024.

How much is NAR paying in the settlement?

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

Does the settlement mean NAR is admitting wrongdoing?

No, NAR continues to deny any wrongdoing in connection with the MLS cooperative compensation model rule. The settlement is a strategic decision to protect members and preserve consumer choice.

How will the settlement affect real estate practices?

The settlement will reshape how compensation is offered and negotiated in real estate transactions. Offers of compensation will move off MLS but can still be negotiated between parties. Additionally, written agreements for buyer representation will become mandatory.

When will the changes take effect?

The practice changes set forth in the settlement agreement will take effect on August 17, 2024.

How does the settlement affect large brokerages?

Brokerages with residential transaction volumes exceeding $2 billion in 2022 are not automatically covered but can opt into the settlement through a specific mechanism provided in the agreement.

What about state and local REALTOR® associations?

All state/territorial and local REALTOR® associations are released from liability under the settlement and do not need to opt in. However, they are required to comply with the practice changes agreed to in the settlement.

How can non-REALTOR® MLSs participate in the settlement?

Non-REALTOR® MLSs can obtain releases by either paying a predetermined amount based on their number of subscribers or participating in non-binding mediation. They must also agree to implement the practice changes outlined in the settlement.

For more detailed information about the NAR Settlement, you can visit the National Association of REALTORS® (NAR) website. This centralized resource offers a wealth of information, including fact sheets that explain the implications of the settlement for both homebuyers and sellers, a broker's guide to upcoming practice changes, and templates for compensation disclosures. These resources are designed to help REALTORS® and consumers navigate the changes that will take effect on August 17, 2024. By visiting the site, you can stay informed about the settlement's developments and access essential tools to better understand how these changes may impact real estate transactions.