9 Important Agent Takeaways From the NAR Lawsuit Settlement (2024)

Once the National Association of Realtors® agreed to settle the Sitzer-Burnett lawsuit in March, there was a lot of speculation about how it would disrupt real estate over the long term. But some of the information around agent-specific changes left room for interpretation.

That’s why we sorted through all 108 pages of the agreement and all 57 pages of NAR’s policy change summary. To help you navigate these important changes, here are nine key points to know about how the settlement will impact most agents. We hope that adding some extra clarity around these changes will help you thrive in this new environment.

1. NAR policy changes start in August

While the settlement was announced in March, the proposed changes don’t take effect immediately. The Court has since granted preliminary approval of the settlement, and NAR announced its MLS policy changes, unless otherwise noted, will go into effect August 17, 2024.

2. The MLS can no longer display commission offers

The settlement agreement includes a few key changes to NAR-affiliated MLS policies:

• NAR will eliminate any requirement for listing agents to offer compensation to buyer agents or other buyer representatives (although it is still permitted)
• Listing agents and sellers will be prohibited from including offers of compensation to buyer agents on the MLS. In fact, MLSs must remove fields related to compensation info
• Offering or accepting offers of compensation to buyer brokers can no longer be a requirement for MLS membership and participation

So agents won’t be able to see or communicate commissions offers on the MLS. However, as NAR explained in March, buyer agent compensation offers can be “an option consumers could pursue off-MLS.”

3. MLSs can’t create or support other sites to get around these policy changes

This rule bars most MLSs from using any “non-MLS mechanism” like an aggregator’s website to relay compensation offers. Additionally, MLSs can’t provide a data feed to a platform that provides offers of compensation from multiple brokers.

4. Buyers have to sign a written agreement before touring with you

If you’re working with a buyer, you must enter into a written agreement with them before touring any home.

Buyers don’t need an exclusive agreement before meeting you or shopping around, but it’s important for them to go into a tour understanding what role you’ll play and what services you’ll provide. A non-exclusive written agreement also gives you an opportunity to educate clients about your value and continue the conversation in person. At the time when an additional agreement is signed, the buyer and the agent should be aligned on all terms and expectations, including compensation, with no surprises.

Read about Zillow’s Touring Agreement

5. Your compensation has to be clearly defined

The NAR settlement requires that you disclose your compensation in a written buyer’s agreement. The disclosure can’t be open-ended – meaning you can’t use vague language such as “whatever amount the seller is offering to the buyer.” The agreement also needs to state that you will not receive compensation from any source that exceeds the amount or rate provided in the agreement.

6. You have to communicate that commissions are negotiable

Commissions were already negotiable prior to the lawsuit, but agents will now be required to inform clients that their compensation is fully negotiable and not set by law. These details must be added to any written agreements in language that’s easy to understand so buyers and sellers are aware.

7. You can’t filter listings based on buyer agent commissions

Agents aren’t allowed to filter out or restrict listings shared with their clients based on the compensation offered. You also can’t restrict listings based on the name of a brokerage or agent, which will help ensure agents known for accepting commissions under a certain threshold receive equal consideration. The settlement mentioned this as a practice change, but NAR already adopted the rule in 2021.

8. NAR is required to develop new educational content

The settlement stipulates that NAR has to create new materials that help shed light on the practice changes. They also have to eliminate any previous materials that don’t align with the new standards. Make sure you keep up to date on the latest facts and guidance so you can stay compliant and help inform clients what’s new.

9. Consumer awareness about commissions may have changed

Despite the sensationalized headlines and predictions you might have seen since March, the settlement agreement doesn’t change much, policy-wise. For example, commissions were always negotiable, and NAR already had a rule preventing agents from filtering MLS listings based on compensation offers. Come August, the biggest change may ultimately be public perception now that more people are aware they have the ability to negotiate.

Whatever the impact, Zillow believes that all clients deserve a dedicated agent who provides them value throughout the homebuying process. We also believe you should be fairly compensated for the value you bring. To help agents grow their business, Zillow will continue to innovate on your behalf and support you through any industry changes.