- What does preliminary approval mean for pending or potential copycat cases?
- Class members are now temporarily enjoined from filing, commencing, prosecuting, intervening in, or pursuing as a plaintiff or class member any claims against NAR or any released party. This prohibition applies to any and all claims, regardless of the cause of action, arising from or relating to conduct that was alleged or could have been alleged in the Sitzer-Burnett and the other settled Actions based on any or all of the same factual predicates for the claims alleged in those Actions.
- NAR will move to have litigation about the MLS cooperative compensation Model Rule stayed, or paused, as to NAR pending the settlement approval process.
- Do individual NAR members need to take any action in order be covered by the settlement agreement?
- No. If you are an NAR member as of the date of the class notice, you are covered by the settlement unless:
- You are an employee of: At World Properties, LLC; Douglas Elliman, Inc.; Douglas Elliman Realty, LLC; eXp Realty, LLC; eXp World Holdings, Inc.; Hanna Holdings, Inc.; HomeSmart International, LLC; Howard Hanna Real Estate Services; Realty ONE Group, Inc.; Redfin Corporation; United Real Estate; or Weichert, Realtors® OR
- You are associated with HomeServices of America or one of its affiliates.
The date of the class notice has not been set, but it will be sent no earlier than August 17, 2024.
Who is covered under the settlement agreement?
NAR’s settlement agreement would release the following organizations from liability for the claims brought on behalf of home sellers relating to compensation.
- All state and local Realtor® Associations
- All association-owned MLSs
- All brokerages with a NAR member as a principal whose residential transaction volume in 2022 was $2 billion or less.
To be clear, if you are a Realtor and:
- Affiliated with a brokerage group that is not listed below, you are covered (even if your brokerage may not be covered)
- Affiliated with any of these brokerage groups, and are an independent contractor, you are covered (even if your brokerage may not be covered)
- At World Properties, LLC; Compass, Inc.; Douglas Elliman, Inc; Douglas Elliman Realty, LLC; eXp Realty, LLC; eXp World Holdings, Inc; Hanna Holdings, Inc.; HomeSmart International, LLC; The Real Brokerage, Inc.; Realty ONE Group, Inc.; Redfin Corporation; United Real Estate; and Weichert Realtors.
How does the settlement affect brokers not included in the release?
NAR has negotiated in the settlement the option for those not included to obtain a release if they so choose to use it. This information can be found within the NAR Settlement PDF (found under NAR Resources)
When will the terms of the settlement go into effect?
The settlement is still awaiting approval by the courts, however if approved, it is anticipated that these rules would go into effect mid-July 2024.
Keep in mind that details and timelines can still change because the proposed settlement is still subject to court approval and will take several months.
What are the proposed changes to the MLS?
The proposed settlement prohibits all offers of compensation on the MLS. It prohibits the MLS from creating or supporting any mechanism for making cooperative compensation offers, even off the MLS.
The MLS is also prohibited from disclosing listing broker compensation or total broker compensation. Sellers will be able to offer concessions on the MLS, but they cannot be conditioned on retaining or paying a buyer representative.
Will my NAR membership dues increase to cover the cost of the settlement?
NAR would pay $418 million over approximately 4 years. NAR will use remaining resources in the most efficient way possible. NAR has stated that their membership dues for 2024 and 2025 will not change because of this payment.
Written agreement required when working with buyers
Under the proposed settlement, a new requirement will emerge that states a written agreement must be entered into between the buyer agent and the buyer. This agreement must disclose the amount of compensation and how it will be received and cannot be “open-ended”. It also states that compensation may not be from any source that exceeds the amount or rate agreed to with the buyer.
Please be sure to view questions 44-62 on the NAR Settlement site for more specific answers to questions regarding written agreements
Can a listing broker still offer cooperation OFF THE MLS?
Yes, there are no prohibitions in the settlement regarding offers of compensation made to buyer brokers or other buyer representatives outside of the MLS.
There will continue to be many ways in which buyer brokers could be compensated, including through offers of compensation communicated off the MLS. However, using the MLS to communicate these offers will no longer be an option.
The types of compensation available for buyer brokers would continue to take multiple forms, depending on broker-consumer negotiations , including but not limited to:
- Fixed-fee commission paid directly by consumers
- Portion of the listing broker's compensation
What about VA Loans and the prohibition on buyers paying commissions directly?
NAR has engaged with the VA on this issue and remains committed to working with them. The VA has not yet addressed whether it will change its requirements.
Are GMAR’s forms compliant with the settlement?
While we are still awaiting the details of the approved settlement, we are certain that minor revisions will be required to some of our forms. We anticipate that we will be making these changes shortly and will provide to our forms vendors as soon as available, with notice to membership.
The changes proposed in the settlement agreement do not prevent offers of compensation to buyer brokers or other buyer representatives off the MLS; and they also do not prevent sellers from offering buyer concessions on a Realtor® MLS (e.g., for buyer closing costs).