YOUR GUIDE TO THE
NAR Settlement
Key Changes That Affect Your Business
AUGUST 13, 2024, we removed all compensation fields in the MLS. No offer of compensation information will be allowed in any MLS fields. Violators will be fined.
Written buyer agreements are now required before ALL in-person or live-virtual home tours.
Be aware of several other smaller items listed below included in the settlement that affect you and review educational trainings available.
About
The Greater Louisville Association of REALTORS® and Metro Search, Inc. (MSI), our MLS Company, have already opted in to be covered by the NAR settlement. Below you will find information and guidance on how the proposed settlement will affect our MLS platform, MLS rules and regulations, and policies and procedures. These MLS changes will apply to all of our MLS Subscribers and Participants.
Know The Facts from NAR
We encourage you to read the NAR provided materials directly from the source and further below we will share our materials and resources that relate to our membership. You can view extensive NAR's resources on their Facts for Realtors® webpage. You can also click here to go straight to their extensive FAQs or WATCH their Window to the Law series of Settlement Fact Videos here.
PREPARE FOR KEY CHANGES
1. CHANGES TO THE MLS PLATFORM
The NAR settlement terms negotiated by NAR, include discontinuing the inclusion of a listing broker's offer of buyers agent compensation in the MLS platform (or any similar platform). On August 13, 2024, we removed the compensation field set from MLS Listing Input. You will no longer be able to list compensation in the MLS. Any violations of this new rule will be subject to the following fines below.
While this change in the settlement directly affects offers of compensation in the MLS, should a seller instruct their listing brokerage to offer compensation to a buyers agent, this can occur outside of the MLS - but NO offer can be listed in any field in the MLS (including notes/remarks).
This change is a required term negotiated by NAR in the national settlement. It is also important that MLS members do not attempt to manipulate listings to insinuate what an offer of compensation may be. Do not use public or private remarks, photos, documents, or any other field.
UPDATED MLS RULES & REGS
To be in compliance and align with the required settlement agreement terms, updates have been made to our MLS Rules & Regulations. Additionally, no commingling rules for real estate listings found in Section 18.20 and 17.3.7 have been removed.
CLICK HERE TO VIEW OUR UPDATED MLS RULES & REGULATIONS DOCUMENT.
*NEW* MLS RULE 4.13
Attempting to communicate the presence or amount of an offer of compensation in the MLS to other MLS Participants and Subscribers is strictly prohibited, if a Subscriber or Participant violates this rule the following penalties shall be assessed.
For a first violation by a Subscriber (agent) of this rule, MSI staff shall record the violation in the Subscriber’s (agent’s) record. MSI will notify the Subscriber (agent) and Participant (broker) and assess a $2000 immediate fine for the Subscriber (agent)
For each second violation by a Subscriber (agent) of this rule within a 12-month period, MSI staff shall record the violation in the Subscriber’s (agent’s) record. MSI will notify the Subscriber (agent) and Participant (broker) and assess a $2500 immediate fine to the Subscriber (agent) and a $500 fine to the Participant (Broker).
For each third violation by a Subscriber (agent) of this rule within a 12-month period, MSI staff shall record the violation in the Subscriber’s (agent’s) record. MSI will notify the Subscriber (agent) and Participant (broker) and suspend the Subscriber’s (agent) MLS access for a period of no less than 60 calendar days and assess the participant (broker) a $500 fine.
2. CONFIRM BUYER AGREEMENT PRACTICES
GLAR'S NEW BUYER AGREEMENT FORMS FOR MEMBER USE:
CLICK HERE to view GLAR's Exclusive Buyer Agency Contract
CLICK HERE to view GLAR's Termination and Release of Exclusive Buyer Agency Contact.
*These forms are now available on Transaction Desk for member use.
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Find ALL GLAR forms and contract changes affected by the NAR Settlement by clicking here.
The settlement terms negotiated by NAR, mandate that MLSs must require all participants working with a buyer to have a WRITTEN agreement before touring a listing including both in-person and live-virtual home tours. That agreement must describe the broker’s compensation, the amount must be objectively ascertainable and not open-ended, and the broker may not receive compensation from any source that exceeds the amount in the agreement.
TIPS FOR BUYER AGREEMENTS & SHOWINGS
Ensure Buyer Agreements are signed and transparent prior to touring a home. These agreements should include:
A. A specific 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 any source.
B. The amount of compensation in a manner that is objectively ascertainable and not open-ended.
C. A term that prohibits the Participant from receiving compensation for brokerage services from any source that exceeds the amount or rate agreed to in the agreement with the buyer.
D. A statement that broker fees and commissions are not set by law and are fully negotiable.
You can also review NAR's Written Buyers Agreements 101, by CLICKING HERE.
3. OTHER IMPORTANT REMINDERS
These additional items are part of the NAR-negotiated settlement and should also be reviewed. While some of these are already in effect in our MLS Rules & Regulations, please review the full list below.
NO advertising services as free.
MLS participants and subscribers are NOT permitted to represent their services as free.
Participant disclosure regarding offers.
MLS participants and subscribers ARE REQUIRED to disclose to sellers and obtain seller approval for any payment or offer, if any, the listing broker or seller makes to another broker, agent, or representative (e.g., attorney) working with a buyer.
Participant disclosure regarding commissions.
MLS participants and subscribers ARE REQUIRED to disclose to sellers and buyers that commissions are not set by law and are fully negotiable in listing agreements, in their buyer broker agreements, and in pre-closing disclosure documents, if any (unless it’s a government specified form).
Off MLS offers permitted.
The above changes do not prevent offers of compensation to buyer brokers outside of the MLS.
Concessions in MLS permitted.
Sellers may offer buyer concessions on the MLS (e.g., for buyer closing costs), so long as they are not limited to or conditioned on the retention of or payment to a cooperating broker.
WATCH OUR EDUCATION & TRAINING
10-Day Member Education Blitz:
Training Guide for NAR Settlement Changes
CONSUMER RESOURCES & DOWNLOADS
Download these shareable fact sheets on what the practice changes mean for home buyers and home sellers. They also articulate the value agents who are REALTORS® provide to consumers in these transactions.
DOWNLOAD NAR'S CONSUMER GUIDES:
NAR Settlement: View ALL Consumer Guides
Steps Between Signing and Closing on a Home
10 Questions to Ask a Seller’s Agent
10 Questions to Ask a Buyer’s Agent
Multiple Listing Services (MLS)
What Veterans Need to Know About Buying a Home
Negotiating Written Buyer Agreements
Why Am I Being Asked to Sign a Written Buyer Agreement?
DOWNLOAD Understanding Real Estate Practice Changes and the Impact on the Consumer
DOWNLOAD HOME BUYER FACT SHEET HERE
DOWNLOAD HOME SELLER FACT SHEET HERE
DOWNLOAD 179 Ways Agents Who Are REALTORS® Are Worth Every Penny of Their Compensation
DOWNLOAD 105 More Ways REALTORS® Are Worth Every Penny of Their Compensation
KENTUCKY REALTORS SETTLEMENT TOOLKIT
Kentucky REALTORS® (KYR) has compiled various resources to help you and your clients understand the NAR settlement and the practice changes. You can download these documents to help support your clients' journey to homeownership.
These resources are available for members on kyrealtors.com/settlement. The password to enter this page is narsettlement24.
KYR has also created a public-facing webpage for consumers to learn more information about the settlement and the importance of hiring a REALTOR®. Please visit www.kyhousingfacts.com for more information.
A Message from the MSI President
GLAR FAQs
1. Who do I contact at GLAR/MSI for questions regarding settlement changes? Email questions to settlementchanges@louisvillerealtors.com.
2. I’m a Broker, why would I be fined for an agent in my office for any related violation to these changes?
Due to the gross liability impact to MSI and the overall association, it is critical to emphasize the importance of compliance to the new compensation structure as well as all other updates. The first time an agent is fined for this type of violation, a warning is issued to their broker.
3. How exactly can I (as a buyer’s agent) be compensated?
Offers of compensation will continue to be an option consumers can pursue off-MLS through negotiation and consultation with real estate professionals. The types of compensation available for buyer brokers would continue to take multiple forms, including but not limited to:
- Fixed-fee commission paid directly by consumers
- Concession from the seller
- Portion of the listing broker’s compensation
4. Will there be new forms issued due to these changes?
For a full list of new and revised forms CLICK HERE
5. What other educational resources are/will be available related to these changes?
For a full list of trainings CLICK HERE.
6. What do these practice changes mean for commercial practitioners?
The proposed settlement agreement is focused on residential real estate transactions. That means most commercial transactions will not be affected. In many markets, commercial listings appear in commercial information exchanges (CIEs), including KCREA, and not multiple listing services (MLSs), and do not include an offer of compensation. The settlement prohibits offers of compensation on an MLS and requires MLS Participants working with buyers to enter into written agreements with their buyers.
Don't Miss NAR Settlement Resources
You can view NAR's resources directly their Facts for Realtors® webpage at Facts.REALTOR. You can also click here to go straight to their extensive FAQs.
SITE INFORMATION UPDATED 10/7/2024
© 2024 Greater Louisville Association of REALTORS®
