[4/30/24]

NAR SETTLEMENT UPDATE (UPDATED FAQ): 

Hello,

 

We are writing to share that we have updated our FAQ to include additional information and clarity about written buyer agreements. As you know, as a part of our settlement, we have agreed to require MLS participants working with buyers to enter into written agreements with their buyers before touring a home.

 

We’ve included the latest questions we’ve answered below for your use. These have also been added to our resource hub on www.facts.realtor and are listed as questions 46 through 62 in our regularly updated FAQ page.

 

We will be releasing additional guidance about the timing of the practice changes required under the settlement in the coming days.

 

As a reminder, we received preliminary approval of the settlement on April 24, but it is still subject to final court approval. The final approval hearing is scheduled for November 26, 2024. As always, if you have any questions, please don’t hesitate to reach out to me or my team.

 

Thank you,

 

Katie

 

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The following Q&A has been developed for NAR Members. Please direct any media inquiries about this to NAR's communications team.

 

The practice change requiring written agreements with buyers is triggered by two conditions: it only applies to MLS participants “working with” buyers and is triggered by “touring a home.” What does it mean to be “working with” a buyer? 

• The “working with” language is intended to distinguish MLS participants who provide brokerage services to a buyer — such as identifying potential properties, arranging for the buyer to tour a property, performing or facilitating negotiations on behalf of the buyer, presenting offers by the buyer, or other services for the buyer —from MLS participants who simply market their services or just talk to a buyer — like at an open house or by providing an unrepresented buyer access to a house they have listed. 
• If the MLS participant is working only as an agent or subagent of the seller, then the participant is not “working with the buyer.” In that scenario, an agreement is not required because the participant is performing work for the seller and not the buyer.
• Authorized dual agents, on the other hand, work with the buyer (and the seller).

 

How will state laws affect the implementation of the practice change requiring written agreements with buyers? 

• Written buyer agreements will be required of all MLS participants working with buyers prior to touring a home, unless state law requires a written buyer agreement earlier in time.

 

What does it mean to tour a home? 

• Written buyer agreements are required before a buyer tours a home for sale listed on the MLS.
• Touring a home means when the buyer and/or the MLS participant, or other agent, at the direction of the MLS participant working with the buyer, enter(s) the house. This includes when the MLS participant or other agent, at the direction of the MLS participant, working with the buyer enters the home to provide a live, virtual tour to a buyer not physically present.
• A “home” means a residential property consisting of not less than one nor more than four residential dwelling units.

 

Does the requirement for a written agreement with buyers mean that MLS participants and buyers must enter into a written agency agreement?

• No. MLS participants and buyers will still be able to enter into any type of professional relationship permitted by state law.
• NAR policy does not dictate:

• What type of relationship the professional has with the potential buyer (e.g., agency, non-agency, subagency, transactional, customer).
• The term of the agreement (e.g., one day, one month, one house, one zip code).
• The services to be provided (e.g., ministerial acts, a certain number of showings, negotiations, presenting offers).
• The compensation charged (e.g., $0, X flat fee, X percent, X hourly rate).
  
  

If an MLS participant hosts an open house or provides access to a property, on behalf of the seller only, to an unrepresented buyer, will they be required to enter into a written agreement with those buyers touring the home?

• No. The new rule will cover every type of relationship where an MLS participant is working with a buyer.

 

Are written buyer agreements required when listing agents talk with a buyer on behalf of a seller only or as subagents of the seller?

• No. If the MLS participant is working only as an agent or subagent of the seller, then the participant is not working for the buyer. In that scenario, an agreement is not required because the participant is performing work for the seller and not the buyer.

 

Are written buyer agreements required when MLS participants perform ministerial acts? 

• Yes. The obligation is triggered once the MLS participant is working with that buyer and has taken them to tour a home, regardless of what other acts the MLS participant performs.
• But an MLS participant performing only ministerial acts — without the expectation of being paid for those acts and who has not taken the buyer to tour a home — is not working for the buyer.

 

Are written buyer agreements required in a dual agency scenario, when a single agent works both for the seller and for the buyer?

• Yes. If an MLS participant is working as an agent for a buyer, a written agreement is required.

 

Are written buyer agreements required in a designated agency scenario, when a single broker works both for the seller and for the buyer, and designates an agent to represent the buyer?

• Yes. If an MLS participant is working as an agent for a buyer, a written agreement is required.

 

MLS participants may not receive compensation for services from any source that exceeds the amount or rate agreed to in the buyer agreement. Does this mean that brokerages can only have one agreement with the buyer?

• No. NAR policy does not dictate:

• What type of relationship the professional has with the potential buyer (e.g., agency, non-agency, subagency, transactional, customer).
• The term of the agreement (e.g., one day, one month, one house, one zip code).
• The services to be provided (e.g., ministerial acts, a certain number of showings, negotiations, presenting offers).
• The compensation charged (e.g., $0, X flat fee, X percent, X hourly rate).

• Compensation continues to be negotiable and should always be negotiated between MLS participants and the buyers with whom they work.

 

In the buyer agreement, can buyers and buyer brokers agree to a range of compensation?

• NAR policy will not dictate the compensation agreed between buyers and buyer brokers (e.g., $0, X flat fee, X percent, X hourly rate).
• Under the settlement, any compensation agreed to must be objectively ascertainable and not open-ended. For example, the range cannot be “buyer broker compensation shall be whatever amount the seller is offering to the buyer.”

 

Should active buyer agreements entered into before the MLS policy change be amended to make sure any compensation is not open-ended and is objectively ascertainable?

• Yes. MLS participants working with a buyer after the effective date of the policy should take steps to ensure that the buyer has agreed to the necessary terms required by the settlement agreement.

 

Should active buyer agreements entered into before the MLS policy change be amended to remove any provision that authorizes the buyer broker to keep any offers of compensation exceeding the amount of compensation agreed with the buyer?

• Yes. MLS participants working with a buyer after the effective date of the policy should take steps to ensure that the buyer has agreed to the necessary terms required by the settlement agreement.

 

Should active listing or buyer agreements entered into before the MLS policy change be amended to include a conspicuous disclosure that compensation is not set by law and is fully negotiable?

• MLS participants must make this disclosure, but active agreements do not need to be amended to accomplish this. MLS participants can do a separate disclosure to satisfy the requirement.

 

Can buyers and buyer brokers rely on an offer of compensation that was on the MLS prior to the effective date of the MLS policy changes? 

• If the sales contract is signed before the MLS policy change, the buyer broker should be able to rely upon the offer of compensation even if closing occurs after the date of the policy change. 
• But if the sales contract is not signed before the date the participant’s MLS implements the policy changes, the offer on the MLS will not be valid and buyers and buyer brokers may wish to protect themselves in writing with the listing broker or seller through a broker agreement or by including the offer of compensation in the sales contract.

 

Does the settlement agreement’s requirement of “objectively ascertainable” and “not open-ended” apply to listing agreements or the compensation sellers pay listing brokers?

• No. Unlike the settlement agreement’s requirements that compensation in buyer agreements be objectively ascertainable and not open-ended, listing agreements can be structured however the seller and listing broker agree, so long as the listing agreement complies with the law, pre-existing MLS policy, and “specifies the amount or rate of any payment” from the seller to the listing broker.

 

Should active listing agreements entered into before the MLS policy change be amended to address the settlement agreement’s prohibition on offers of compensation being communicated on the MLS? 

• If the listing agreement instructs the listing broker to make an offer of compensation without reference to the MLS, no change to the listing agreement is needed, as the listing broker can comply with that instruction without violating the MLS policy change.
• But if the listing agreement specifies that offers of compensation be made “on the MLS,” then the listing broker should work with the seller to amend the listing agreement before the MLS policy change is implemented, to make it clear the listing broker will not make an offer of compensation on the MLS and will not be violating the listing agreement by failing to make an offer of compensation on the MLS.

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[4/10/24]

NAR SETTLEMENT UPDATE :

Fellow members, 

 

I recently sat down with Real Estate Insiders Unfiltered to discuss the future of NAR and the recently announcement settlement agreement. The episode was published today, and I hope you will all take some time to listen. The podcast can be viewed here.

 

Thank you, as always, for the work you do to support your clients, and for your continued support of our organization.

 

Regards,

Kevin

 

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[3/26/24]

NAR SETTLEMENT UPDATE :

Fellow members, 

 

I want to share with you all an article that was published in REALTOR® Magazine that speaks to the truth and facts of the settlement agreement. The article provides information on who is covered, the changing business practices, and shares additional resources for members. You can read the article on our website and I hope it will help everyone better understanding the settlement agreement.   

 

We have also prepared a Settlement Agreement Facts Toolkit, available on facts.realtor, which you can navigate directly to here. The toolkit provides assets and content that you can easily share through social media. By sharing these assets we can address misinformation in the industry and ensure NAR’s perspective is heard loud and clear. 

 

Please continue to check facts.realtor for the latest resources for our members. If you’d like to direct people to information about the settlement, please continue to invite them to visit competition.realtor.

 

Thank you, as always, for your continued support.

 

Regards,

Kevin

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[3/25/24]

NAR SETTLEMENT UPDATE :

Fellow members,

I’m reaching out to let you know that NAR Chief Legal Officer Katie Johnson and I recorded a webinar on Friday where we further discussed the settlement agreement and what it means for both the association and its members. Today, we have posted it to facts.realtor, and you can navigate directly to it here.

 

Please note that facts.realtor has additional materials to support you, including: 

• The latest settlement FAQs
• FAQs focused on financing and interested party contributions
• Slides that cover the key terms of the settlement
• A timeline showing anticipated next steps in the process
• An overview of the scope of the release for NAR members 

 

Please continue to check facts.realtor for the latest resources for our members. If you’d like to direct people to information about the settlement, please continue to invite them to visit competition.realtor.

 

Before closing, I’d like to reiterate a sentiment I shared in my on the road video last week. I am deeply grateful for our community of REALTORS®. The outpouring of support the Leadership Team and I have received over the past few days fills me with optimism for our association and our industry. I urge you all to continue to be an advocate for NAR and our industry, and we are working hard to ensure you have the tools you need to do so.

 

Thank you, as always, for your continued support.

 

Regards,

Kevin Sears

 

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ADDITIONAL RESOURCES

Throughout 2024, NAR is making the popular Accredited Buyer’s Representative (ABR®) designation course, typically $295, available to REALTORS® at no cost. Take the first step toward earning your ABR® designation at become.abr.realtor.

NAR members can continue to access the latest information and FAQs about the settlement on facts.realtor.

NAR will also continue to provide updates about the settlement process as it unfolds on competition.realtor.

Visit ThatsWhoWeR.realtor to view the new consumer campaign ads, and to leverage turnkey advertising and social assets to share. The campaign demonstrates the expertise of REALTORS® helping their clients navigate the risks, pitfalls, and complexities of buying or selling a home or property, reinforcing their expertise, commitment and consumer-first approach.

 

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[3/22/24]

NAR SETTLEMENT UPDATE :

 

Resources

• NAR Newsroom
  • National Association of Realtors® Reaches Agreement to Resolve Nationwide Claims Brought by Home Sellers
  • Correcting the Record: NAR Does Not Set Commissions
• Litigation FAQ
  
  

NAR Video Updates

Kevin Sears: Discussing Key Settlement Considerations and Ongoing Advocacy Efforts On the Road | March 21, 2024

NAR President Kevin Sears shares an update on the association’s settlement agreement to resolve home seller litigation and highlights NAR’s ongoing work to advocate for members and consumers.

Watch this video from Kevin Sears.

 

Litigation Update | March 15, 2024

NAR President Kevin Sears and Chief Legal Officer Katie Johnson discuss how NAR’s resolution provides a path forward for the industry and helps ensure consumer choice.

Watch the NAR Litigation Update video.

 

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[3/19/24]

NAR SETTLEMENT UPDATE :

 

We understand that the recent news of the NAR settlement proposal has sparked discussions and questions within our industry. The leadership at WCAR wants to assure you that we are actively monitoring the situation and working to provide support and guidance to our members, clients, and the protection of private property rights in Williamson County.

 

Upon receiving the details of the NAR settlement proposal on Friday, similar to you, we immediately began assessing its potential impact and how we can best navigate these changes together. It's crucial to note that this is a proposed settlement subject to court approval, a process that may take several months. During this time, we will stay informed, prepare for what we know, and remain adaptable to future developments.

 

As we move forward, we encourage you to focus on understanding the facts and preparing for the future. While changes are on the horizon, there are opportunities for our industry to flourish. Here are actionable steps you can take now:

 

1. Familiarize Yourself with Buyer Representation Agreements: Beginning in July, a Buyer Representation Agreement must be signed before showing any property. Take the time to understand the requirements and implications.
2. Communicate Effectively as a Listing Agent: Learn how buyer's agents can be compensated, explain seller participation, and discuss potential impacts with your clients.
3. Enhance Buyer Consultations: If you haven't already, integrate buyer consultations into your business practices. Create a robust presentation that highlights your value proposition and fees.
4. Maintain a Positive Mindset: Focus on the opportunities these changes bring rather than viewing them as obstacles.

 

 

A Word from WCAR President Brandi Thigpen: 

 

At WCAR, we are committed to ensuring our members are well-informed, supported, and empowered during this period of change. Here's how we're assisting you:

 

1. Access to Information: We regularly update our webpage with the latest information to keep you informed about the progress of these matters.
2. New Forms/MLS Changes: As part of the settlement, NAR has agreed to require written buyer representation agreements for MLS participants working with buyers starting around mid-July 2024. We are working closely with Tennessee REALTORS¬Æ to provide the necessary forms and resources based on these new requirements. Additionally, we're collaborating with Realtracs MLS to ensure the necessary changes align with the settlement.
3. Educational Opportunities: We recognize the importance of professional development during this time of change. That's why we're excited to offer WCAR's Accredited Buyer Representation (ABR) Designation Course, focusing on buyer agent education. This course can be a valuable asset in your toolkit. Keep an eye on our class calendar, newsletter, and social media for other professional development opportunities.
4. Media Presence: We utilize our media connections to disseminate accurate information about REALTORS, the value you bring, and the impact of this settlement on consumers. We'll also share media content on social media platforms to provide timely updates that are easily accessible. Stay connected with us on social media for the latest news.

 

As we navigate these developments surrounding the NAR settlement proposal, I want to remind you that the settlement process is subject to court approval, which could take several months. In the meantime, we are actively strategizing on how to best support you through these changes. Our leadership is dedicated to your success. As real estate professionals, we excel in adapting to market shifts, meeting client needs, and adhering to industry regulations. WCAR is fully committed to equipping our members with the necessary tools and training to navigate these proposed changes effectively. 

 

Ultimately, this settlement presents us with another opportunity to showcase our resilience and thrive in a changing landscape. 

 

Thank you for your continued trust and membership.

 

Warm regards,

 

Brandi Thigpen 

2024 President of WCAR

 

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[3/15/24]

NAR SETTLEMENT UPDATE :

 

Dear WCAR Members,

 

We are reaching out to inform you of a significant update from the National Association of Realtors (NAR) regarding an agreement made to resolve the Home Seller Class Action Lawsuits. The proposed settlements encompass two major changes that will impact our members, and it's important for you to be aware of them. Keep in mind that these changes are still subject to approval by the court.

 

1. Firstly, NAR has agreed to implement a new rule that prohibits offers of compensation on the MLS. This change is scheduled to take effect in mid-July 2024. 

2. Additionally, as part of the settlement, MLS participants working with buyers will be required to enter into written representation agreements with those buyers. This change will also go into effect in mid-July 2024.

 

As your trusted Board, we are dedicated to keeping you informed and offering educational resources to support you, our valued member, during this proposed change.

 

If you have questions about what's next and how things will change, visit NAR's central resource for updates on strengthening the association, defending REALTORS®, and future plans. The NAR settlement fact sheet may be accessed below: 

NAR FACT SHEET

Click the link below to hear from President Kevin Sears and Chief Legal Officer Katie Johnson on how the National Association of REALTORS’® resolution provides a path forward for the industry and helps ensure consumer choice.

KEVIN SEARS VIDEO