The NAR Settlement and Commission Rules: What Changed
In 2024 the National Association of REALTORS® settled the nationwide class-action lawsuits over real estate commissions. The settlement changed how buyer-broker pay is handled on MLSs and in buyer contracts.
The settlement in brief
- Payment: NAR agreed to pay $418 million over about four years.[1][2]
- Background: The settlement followed an October 2023 jury verdict of about $1.8 billion in the Sitzer/Burnett case in Missouri.[2]
- Approval: The court granted preliminary approval on April 24, 2024,[1] and U.S. District Judge Stephen Bough in Kansas City, Missouri granted final approval on November 26, 2024.[2]
- No admission: NAR says the settlement makes clear it continues to deny any wrongdoing.[1]
The practice changes (effective August 17, 2024)
- No offers of compensation on the MLS. Offers of compensation to buyer brokers can no longer be communicated through the MLS. According to NAR, sellers can still offer buyer concessions on the MLS (for example, for closing costs), and offers of compensation remain an option consumers can pursue off-MLS through negotiation.[1][3]
- Written buyer agreements. MLS participants working with a buyer must enter into a written agreement before the buyer tours a home.[1]
According to NAR, the written buyer agreement must state the amount or rate of compensation the buyer's agent will receive in an objectively ascertainable way, must say the agent cannot receive more than that amount from any source, and must include a conspicuous statement that broker fees are not set by law and are fully negotiable.[3]
What it means for MLSs
MLSs had to stop communicating offers of compensation and update their rules to match the practice changes.[3] Separate MLS rules on listing submission — such as the Clear Cooperation Policy — are a different issue and are now the focus of the Compass–MLS lawsuits.
Follow ongoing coverage in NAR Settlement and NAR & Commissions.
Sources
- Settlement FAQ (May 2024) — National Association of REALTORS®
- Judge approves US realtor group's $418 mln sales commission settlement — Reuters, Nov. 26, 2024
- Summary of 2024 MLS Changes — National Association of REALTORS®
This guide is original MLS Daily News reporting based on the sources above. It is general information, not legal advice. Found an error? See our corrections policy.
