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.

NAR explored settling throughout the litigation and carefully considered all legal options. 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 NAR legal counsel believed 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, NAR 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.

• Release of liability: The agreement would release NAR, over one million NAR members, all state/territorial and local REALTOR® associations, all REALTOR® 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. Individual members and all brokerages with an NAR member as principal whose residential transaction volume in 2022 was $2 billion or below are released by the agreement and not required to opt in.
• Remove compensation information from the MLS.
• Prohibit sharing of offers of compensation in aggregate on sites using information from MLS, and prohibiting filtering or searching for offers of compensation.
• Buyers’ representation agreements are now required to be in place prior to showing properties.
• Settlement payment: NAR would pay $418 million over approximately four years. 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.

• If you are a buyer and your agent is using an MLS, you will need to sign a written agreement with your agent before touring a home so you understand exactly what services will be provided, and for how much.
• Written agreements are required for both in-person and live virtual home tours.
• You do not need a written agreement if you are just speaking to an agent at an open house or asking them about their services.
• Agent compensation for home buyers and sellers continues to be fully negotiable.
• When finding an agent to work with, ask questions about their services, compensation, and these written agreements.
• Listing brokers should inform their clients that offers of compensation will no longer be an option on an MLS.

Beginning August 17, the NAR settlement will require brokers who are working with a buyer to enter into a written buyer brokerage agreement.

Buyer brokerage agreements lay out exactly what you, as a broker, will provide to your buyer clients including services provided and how compensation will be determined and paid.

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 cannot be communicated via an 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.

A key element of the NAR settlement changes how buyer brokers are paid and eliminates and prohibits any offers of compensation in the MLS between listing brokers or sellers to buyer brokers or other buyer representatives. Per the NAR, All MLSs will eliminate broker compensation fields and broker compensation information within the MLS.

Compensation conversations and negotiations will still be able to occur outside of the MLS. Buyers could pay buyer brokers directly. Other options include the seller paying the buyer’s agent or agreeing to pay concessions to cover some of the buyer’s costs in the transaction.

Note: If the buyer broker has negotiated a compensation rate with their client in the buyer representation agreement, the NAR settlement prohibits the buyer broker from receiving compensation through the MLS. Compensation should be agreed to before showing properties.

The settlement removes the ability for compensation offers to be shared and viewed on MLSs. Compensation information will no longer be available on MLSs, meaning home buyers will no longer see how much compensation is offered by the seller’s broker to the buyer’s broker.

Negotiations of compensation can occur directly between buyers and brokers and be discussed outside of MLS. The settlement also prohibits the listing broker from disclosing any offers of compensation to any third party, such as in a website or platform.

Beginning August 17, all buyer brokers will be required to enter into a written buyer representation agreement before showing properties to buyers. If a buyer does not want to enter into a written agreement, the broker is not required to continue representing the buyer. However, brokers should work with clients to understand the value of the agreement and its importance in ensuring clarity on services provided and compensation.

The written Buyer Representation Agreement will provide clarity on the relationship between the broker and buyer. It will outline the services provided by the broker, how compensation will be determined and paid, and the responsibilities of both parties. This agreement is intended to ensure transparency and help buyers understand what they are agreeing to in their working relationship with a broker.

The settlement changes how compensation information is handled in MLSs and requires written buyer representation agreements. Brokers and agents will need to adapt to these changes by ensuring that compensation negotiations occur outside the MLS and that all buyer representation agreements are documented in writing. The settlement aims to provide a clear and transparent process for compensation and services provided.

The settlement does not directly address MLS fees. However, changes in how compensation information is handled in MLSs may have indirect effects on MLS operations and costs. MLSs will need to update their systems to comply with the settlement requirements, and these changes may affect how fees are structured or assessed. It is important for MLS members to stay informed about any potential changes to fees or services from their MLS.

The settlement will require MLSs to remove compensation fields and related information from their systems. This means MLSs will no longer facilitate or display compensation offers between brokers. MLSs will need to update their policies and systems to comply with the settlement. The role of MLSs will shift away from handling compensation details and focus more on other aspects of property listings and broker interactions.

Buyers should communicate openly with their brokers and ask questions about how compensation will be handled and what services will be provided. It is important to understand the terms of the written Buyer Representation Agreement and how compensation will be negotiated and paid. Buyers should feel comfortable discussing any concerns with their brokers to ensure they have a clear understanding of the agreement and the services they will receive.

The settlement does not set or mandate commission rates. Commission rates will continue to be negotiable between buyers and brokers. The settlement focuses on removing compensation information from MLSs and requiring written agreements, but it does not dictate specific commission rates. Rates will still be determined through negotiations between buyers and brokers.

The settlement does not change the fundamental process of how commissions are paid. However, it removes the ability to advertise compensation offers in MLSs, which may impact how commissions are negotiated and agreed upon. Brokers and buyers will need to handle compensation discussions directly, and commissions will be paid according to the terms agreed upon in the written Buyer Representation Agreement.

Brokers and agents can prepare by familiarizing themselves with the new requirements, including the need for written Buyer Representation Agreements and the removal of compensation information from MLSs. They should update their processes and systems to comply with the settlement and communicate the changes clearly to clients. Training and resources may be available to help brokers and agents adapt to the new requirements effectively.

Resources such as NAR's official communications, webinars, and training materials are available to help understand the settlement. NAR will provide guidance and updates on how to comply with the new requirements. Brokers, agents, and consumers can access these resources to stay informed and ensure they understand the implications of the settlement.

Yes, compensation can still be negotiated directly between buyers and brokers. The settlement does not change the ability to negotiate compensation; it simply removes the ability to advertise compensation offers in MLSs. Negotiations can occur outside of MLS and be documented in the written Buyer Representation Agreement.

Failure to comply with the settlement requirements may result in legal consequences and potential liability. Brokers and agents are encouraged to adhere to the new requirements to avoid any issues and to ensure they are operating within the bounds of the settlement. Compliance is important to maintain the integrity of the real estate process and avoid potential disputes.

The settlement will impact how compensation offers are marketed and shared, specifically by removing compensation information from MLSs. Real estate marketing practices will need to adapt to these changes, focusing more on other aspects of marketing and client engagement. Brokers and agents should update their marketing strategies to align with the new requirements.

The settlement will result in changes to how compensation information is handled and how buyer representation agreements are managed. These changes aim to enhance transparency and ensure that compensation and services are clearly documented. The overall impact on the industry will depend on how brokers, agents, and consumers adapt to these changes and how effectively they are implemented.

Yes, MLS systems will need to be updated to comply with the settlement requirements. Compensation fields and information will be removed from MLSs, and MLSs will need to adjust their systems and policies accordingly. This may involve technical changes and updates to ensure compliance with the new rules.

MLS participants should review the settlement requirements and understand the changes that will affect their systems and practices. They should work with their MLS providers to implement necessary updates and ensure compliance. Clear communication with members and training on the new procedures will also be important to ensure a smooth transition.

The settlement aims to enhance transparency by requiring written Buyer Representation Agreements and removing compensation information from MLSs. This will ensure that buyers and brokers have a clear understanding of the services provided and compensation terms, promoting a more transparent and accountable real estate process.

NAR members should familiarize themselves with the settlement requirements and update their practices accordingly. This includes implementing written Buyer Representation Agreements and adapting to changes in compensation information handling. Members should stay informed about any additional guidance or resources provided by NAR to ensure compliance and smooth adaptation to the new rules.

The settlement does not specifically address changes to commission dispute resolution. However, with the removal of compensation information from MLSs, brokers and buyers will need to handle commission disputes directly through negotiations or other means. Clear documentation and communication in the written Buyer Representation Agreement can help mitigate potential disputes.

The settlement may impact training and education by necessitating updates to curricula and training materials to reflect the new requirements. Brokers and agents will need to be educated on the new rules, including the handling of Buyer Representation Agreements and changes in MLS practices. NAR and other industry organizations may provide resources and training to support this transition.

The settlement primarily impacts the U.S. real estate market and MLS practices. International buyers and sellers should be aware that compensation practices may differ from those in their home countries. They should work closely with their brokers to understand how the settlement affects their transactions and compensation arrangements in the U.S.

The settlement may influence how new real estate technology and platforms handle compensation information. Technology providers will need to adapt their systems to comply with the new requirements, including the removal of compensation data from MLSs. This could lead to changes in how technology solutions support brokers and agents in managing transactions and compensation.

State and local REALTOR® associations play a crucial role in implementing the settlement by updating their policies, procedures, and MLS systems to align with the new requirements. They will also provide guidance and support to their members to ensure compliance and smooth transition to the new practices.

The settlement aims to resolve current litigation and provide a framework for handling similar issues in the future. By addressing compensation practices and promoting transparency, the settlement may reduce the likelihood of future litigation related to these issues. However, the impact on future litigation will depend on how effectively the settlement is implemented and adhered to.

Consumers should seek information from their brokers or real estate professionals if they have concerns about the settlement. They can also review resources provided by NAR or other industry organizations to understand how the settlement affects their transactions. Open communication with brokers and staying informed about changes can help address any concerns and ensure a smooth real estate experience.

The settlement resolves certain legal issues, but there may be additional legal actions or adjustments as the implementation progresses. It is important for brokers, agents, and industry stakeholders to stay informed about any further developments or legal updates related to the settlement.