Post-NAR Settlement Landscape (August 2024)

In recent years, there have been class-action lawsuits against the National Association of REALTORS® (NAR) and real estate brokerages.These lawsuits concern brokerages with obligations to act as fiduciary and compensation. As of August 2024, NAR and partnering brokerages have entered into settlement agreements related to this litigation. One of the changes taking place requires Buyer's Agents must enter a written agreement that clearly discloses the details of compensation that will be received prior to touring any listing. Offers of compensation made to a Buyer's Agent may not be made on an MLS. Buyer's agents may not advertise their services as "free" unless they are receiving no financial compensation from any source.

Compensation structure has changed. Prior the listing agent would share the negotiated commission with the buyer’s agent, but now both agents would need to directly compensated for representation. The buyer and/or seller pays their respective agent as part of their closing process. I expect the use of Buyer Representation agreements will be more common with the agreement that discloses details of compensation.

Overall does not change the landscape of transactions, but it does raise the barrier of entry to buyers who are looking to be represented by a Buyer’s agent. Compensation for the buyer’s agent would now be a direct cost onto the buyer. In the past the buyer’s agent was an indirect cost to the buyer as their compensation was baked into the purchase price for which the listing agent would split their commission with the buyer to help close the sale.