What you need to know about the NAR’s commission lawsuit

There has been a lot of noise and misinformation circulating since Friday, the 15th of March regarding the lawsuit settlement with the National Association of REALTORS®. I am reaching out to all my customers and clients to help you navigate these changes and to invite you to schedule time with me to address any questions you may have.

 

Commission rates for licensed real estate agents have always been negotiable. The National Association of REALTORS® does not set commission agreements, nor do regional associations like the Arizona Association of REALTORS® and the Phoenix Association of REALTORS®. Typically, home sellers pay commissions from the equity in their homes to both their listing agent and the buyer's agent through their respective brokerages. Commissions usually range from 4% to 6% of the sales price and can be less depending on the transaction.

 

The settlement must be approved by the court, and each state and region will update their forms, processes, and details accordingly. Buyer-broker compensation will no longer be communicated through the Multiple Listing Service (MLS), leading to changes starting in mid-July 2024. In summary, sellers will not be able to offer cooperative compensation via NAR-affiliated MLS systems, and buyer agents will need written agreements with their clients.

 

Buyer clients will need to hire and pay their buyer's agent, with compensation possibly coming from seller concessions. Buyer agents will have the opportunity to showcase their value more transparently, strengthening client relationships. Beginning mid-July, the amount a seller might offer a buyer's agent will not appear in the MLS as is currently the case.

 

Sellers will still be able to negotiate the commission they pay, and buyers can also negotiate the commission and how it is paid. Buyers and sellers can still compensate agents for their services, with fees being negotiable as always.

 

The decoupling of commission will prevent cooperating broker compensation through all nationwide MLS systems. Sellers can still offer compensation to the buyer's agent, but it won't be displayed on the MLS. Buyer agents will need written agreements with their clients, which I have personally always practiced.

 

Please contact me with any questions or concerns, and I will assist in addressing them.

 

📥 Download the Settlement Factsheet

 

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