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new NAR settlement terms are now in effect

With a deadline of August 17, the new NAR settlement terms are now in effect. But what does this mean for REALTORS? Let’s break it down.

About the NAR settlement terms

NAR Chief Legal Officer Katie Johnson outlined the new business practice changes and the revisions to NAR’s MLS policy handbook, including the following five changes:

  1. Eliminating and prohibiting the requirement of compensation offers in the MLS between listing brokers or sellers to buyer brokers or other buyer representatives.
  2. Prohibiting MLS participants, subscribers and sellers from making any compensation offers in the MLS to buyer brokers or other buyer representatives.
  3. Eliminating all broker compensation fields and compensation information in the MLS and not creating, facilitating or supporting any non-MLS mechanism.
  4. Prohibiting the use of the MLS data or feeds to directly or indirectly establish or maintain a platform of compensation offers from multiple broker or buyer representatives.
  5. Agents and brokers must provide compensation disclosures to sellers. Buyers, sellers and MLS participants must have a written agreement before touring a property.

The MLS will terminate the participant’s access to any MLS data or feeds for violating this updated policy.

The written buyer agreement 

Since the new NAR settlement terms are now in effect, let’s look at what the written buyer’s agreement includes.

A written buyer agreement must consist of four main parts. First, a specific and conspicuous disclosure of the amount or rate of compensation the participant will receive or how this amount will be determined, to the extent that the participant will receive compensation from a source. Secondly, the amount of compensation should be determined in an objectively ascertainable way.

Third, participants cannot receive compensation for brokerage services from any source that exceeds the amount stated in the agreement. Fourth, a prominent statement clarifying broker fees and commissions are not set by law and are fully negotiable.

Summary

As of August 5, the Lee County Association of REALTORS made these changes to the MLS and implemented the new regulations. If you have questions about these terms, refer to the NAR Settlement FAQ page for more information.

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