Understanding the NAR Settlement: Facts Every Charlotte County Homeowner Should Know

Highlights:

Facts First

There’s much the media has gotten wrong about NAR’s settlement, which would require the association to pay $418 million over four years. Some outlets have suggested that NAR previously set or guided commissions to a standard rate of 6%. Even President Joe Biden, in recent comments, misspoke in suggesting that the settlement makes commissions negotiable for the first time.

This is false. NAR does not set commissions, and commissions were negotiable long before this settlement. They are and will remain entirely negotiable between brokers and their clients. Housing prices are dictated by market forces beyond members’ control.

Getting the facts right is important, especially because the settlement agreement is complex. NAR continues to engage with media to correct inaccurate reporting about the settlement. Members and consumers can refer to official NAR sources, like facts.realtor, for the most accurate and up-to-date information.

Settlement Goals

The settlement achieves two important goals: protecting members to the greatest extent possible and preserving consumer choice. Specifically, it:

• Resolves claims against NAR and nearly every member, all state, territorial and local REALTOR® associations, all association-owned MLSs, and all brokerages with an NAR member as principal whose 2022 residential transaction volume was $2 billion or below.
• Preserves cooperative compensation as an option for consumers, as long as offers of compensation occur off of the MLS.

NAR fought for a release that covered all industry players, shaped in part by large settlements reached by other corporate defendants. Throughout the process, NAR engaged members to consider their perspectives and interests.

Changing Business Practices

The settlement also mandates two key changes to business practices for members and MLS participants:

• New MLS rule prohibiting offers of compensation via MLS. Offers can still be negotiated off-MLS with a real estate professional.
• New rule requiring MLS participants working with buyers to enter into written agreements before the buyer tours a home. This improves transparency and ensures consumers understand the services and value provided.

NAR continues to deny wrongdoing and maintains that cooperative compensation is in the best interest of consumers. These changes are expected to go into effect in mid-July under the proposed settlement terms.

FAQs

What does the NAR settlement mean for homebuyers and sellers?

The settlement does not change the fact that commissions are negotiable between brokers and clients. Buyers and sellers still have full control over the terms of their transactions.

Are commissions now set by NAR?

No. NAR has never set commissions. Commissions remain fully negotiable, just as they were before the settlement.

What business practice changes are included in the settlement?

NAR will prohibit offers of compensation via MLS, and buyers working with MLS participants must have written agreements before touring homes. Both changes aim to improve transparency and consumer understanding.

When do these changes take effect?

The new rules are expected to go into effect in mid-July under the proposed settlement terms.

Where can I find official, up-to-date information about the settlement?

For accurate information, refer to facts.realtor and official NAR communications.

By Samarra Landry, Southwest Florida Realtor and local market expert for Gulf Cove, South Gulf Cove, and West Port

Samarra Landry | Charlotte County Real Estate Expert | samarralandry.com