(WKBN) – Practice changes set forth in a settlement agreement with the National Association of Realtors (NAR) go into effect on August 17th.
In advance of the changes, NAR has created a tab on its website where real estate agents, buyers, and sellers can better understand what the new rules mean.
This practice change is part of a class action lawsuit settlement targeting real estate agents and brokers. NAR agreed to pay $418 million in damages to resolve several lawsuits from home sellers. The lawsuit alleged that NAR's fee rules force home sellers to pay excessive fees. NAR denies wrongdoing.
The settlement also includes changes to how sellers and buyers negotiate fees in home sales, with NAR agreeing to eliminate its fee-sharing system.
The standard 6% commission is split between the buyer and seller. That information was typically shared in MLS listings. Currently, offers of compensation must be removed from the MLS, the real estate database used by real estate agents.
With compensation offers removed from the MLS, interested parties will no longer know how much a home will cost just by looking at the MLS. Compensation offers may also be made outside of MLS.
A seller may provide concessions to a buyer with respect to the MLS (for example, concessions to the buyer's closing costs).
Additionally, as part of the new rules, all agents showing homes to buyers will be required to enter into a written contract with that buyer.
