NAR Litigation Settlement and the Major Changes

07.27.2024 06:44 PM - By Robert MacLean

House for Sale

NAR Litigation Settlement and the Major Changes

Updated 7/26/24


The deadline for the new changes to go into affect in how buyers and sellers interact with their agents is 8/17/24. The wording of the new documents have all been finalized (7/25/24). These changes are the biggest changes in real estate in the 20 years I have been doing this. The Residential Purchase Agreement (RPA) is 25 pages. The Buyer Representation and Broker Compensation Agreement (BRBC) is 13 pages. The Residential Listing Agreement (RLA) is 17 pages. And that does not include any of the initial and post new addenda, any disclosures, or escrow docs. There is a lot more to read and understand. Here is a quick overview of those changes and how they affect you going forward. 


Here is what the settlement means for homebuyers:

  • You will need to sign a written agreement with your agent before touring a home.
  • These agreements can be exclusive or non-exclusive.
  • Before signing this agreement, you should ensure it reflects the terms you have negotiated with your agent and that you understand exactly what services and value will be provided, and for how much.
  • The buyer agreement must include four components concerning compensation:
    1. A specific and conspicuous disclosure of the amount or rate of compensation the real estate agent will receive or how this amount will be determined.
    2. Compensation that is objective (e.g., $0, X flat fee, X percent, X hourly rate)—and not open-ended (e.g., cannot be “buyer broker compensation shall be whatever the amount the seller is offering to the buyer”).
    3. A term that prohibits the agent from receiving compensation for brokerage services from any source that exceeds the amount or rate agreed to in the agreement with the buyer; and,
    4. A conspicuous statement that broker fees and commissions are fully negotiable and not set by law.
  • Written agreements apply to both in-person and live virtual home tours.
  • The max timeframe for these agreements are 3 months with a cancellation period of a max of 30 days
  • You do not have to sign anything with the agent holding the open house if you are touring an open house on your own. 
  • The seller may agree to offer compensation to your agent. This practice is permitted but the offer cannot be shared on a Multiple Listing Service (MLS)— MLSs are local marketplaces used by both buyer brokers and listing brokers to share information about properties for sale.
  • You can still accept concessions from the seller, such as offers to pay your closing costs.
  • You can ask for the seller to pay your buyer agent's compensation with every offer. 

These practice changes will go into effect August 17.


Here is what the settlement means for home sellers:

  • Sellers will sign an agreement with their broker only for the compensation the seller will pay their broker. There will no longer be a compensation in the MLS that the seller is offering to the buyer's broker. 
  • Your agent must disclose to you and obtain your approval for any payment or offer of payment that a listing broker will make to another broker acting for buyers.
  • This disclosure must be made to you in writing in advance of any payment or agreement to pay another broker acting for buyers, and must specify the amount or rate of such payment.
  • If you choose to approve an offer of compensation, there are changes to how this can happen.
  • You as the seller can still make an offer of compensation, but your agent cannot include it on a Multiple Listing Service (MLS)—MLSs are local marketplaces used by both buyer brokers and listing brokers to share information about properties for sale.
  • Your agent can advertise your listing via off-MLS platforms such as social media, flyers and websites.
  • You as the seller can still offer buyer concessions on an MLS (for example, concessions for buyer closing costs).

These settlement practice changes will go into effect August 17.

Original Post 3/15/24     


Some of you may have been following the lawsuit against the National Association of Realtors (NAR). For those of you that have not, here is a quick summary, and then I will get into the changes. NAR and the larger national real estate brokerage companies were sued by a group of sellers stating that NAR violated anti-trust laws relating to the sell of residential property. NAR has a tentative settlement for $418 million and agreed to make some changes in broker agreements with buyers and sellers. 


By agreeing to the settlement NAR:

  • Received a release of liability for all members, associations, MLSs, and real estate brokerages (that had less than $2 billion in transaction volume) and admitted to no wrongdoing. 
  • Preserved the choices consumers have regarding real estate services.

Here are the major changes that will take affect:
  • Sellers and buyers will each have their own separate agreement with their broker of choice. 
  • Sellers will sign an agreement with their broker only for the commission the seller will pay their broker. There will no longer be a commission in the MLS that the seller is offering to the buyer's broker. 
  • Buyers will sign an agreement with their broker only for the commission the buyer will pay their broker. The sellers can pay the buyer's broker commission through a negotiation in the buyer's offer. Any compensation offered by the seller's broker is credited against the buyer's obligation to pay. The buyer may end up not having to pay anything at all for the broker's services. 
  • Like the requirement for seller's to sign an agreement with their broker before they list their house, buyers will now sign an agreement with their broker before the agent can show them properties. 
  • All of these changes will go into effect by mid July 2024

These are some major changes, and it may be a little confusing. Reach out to me for any questions that you may have. I will keep you updated on any further changes. 
Robert MacLean

Robert MacLean