Let's Talk About the NAR Settlement...

FIRST & FOREMOST, Brokerage Compensation
CONTINUES To Be NEGOTIABLE.
Indeed, the amount, format, or rate of real estate compensation
is not fixed by law, but is set by each broker or firm individually
and is fully negotiable.

In an effort to bring equity & clarity into the conversations of brokerage commissions, the National Association of REALTORS® has instituted two new rules effective August 17th, 2024. While the new rules seem simple enough, their practical implications will bring changes to the brokerage compensation conversations between REALTORS® and our buying & selling clients.

The new rules effective August 17, 2024 are:

1. All REALTORS® must enter into a Written Buyer Agency Agreement
Prior to Touring a Home with a Buyer Client,
whether In Real Life (IRL) or Virtually.

2. Multiple Listing Services are no longer allowed to publish
Offers of Compensation to Accompany Listing Details. 

Practical Implications for Buyers
For over twenty years, real estate professionals in North Carolina have practiced Exclusive Buyer Agency. Heretofore, the practice has required that Buyers' Brokers and their Buyer Clients enter into a Written Buyer Agency Agreement PRIOR to writing an Offer to Purchase & Contract. Beginning August 17, 2024, as a result of the NAR Settlement, the Written Buyer Agency Agreement MUST BE EXECUTED PRIOR TO TOURING a Home with Clients, whether the viewing takes place In Real Life(IRL) or Virtually Online. Among other terms and conditions, the Buyer Agency Agreement will specifically & conspicuously disclose the amount or rate of compensation the Buyers' Broker's firm will receive, how this amount is determined and whom is liable for its payment. At the conclusion of relevant discussions and execution of the Exclusive Buyer Agency Agreement, buyers & broker may begin touring properties of interest.

As a result of Rule #2 of the NAR Settlement, Buyers' Brokers must by default contact listing brokers of properties of interest to query any Buyer Agency compensation offered by their sellers/brokerage. It is important that buyers understand the details of any Buyer Agency compensation offered and how that compensation aligns with the liabilities agreed upon in the Buyer Agency Agreement. Buyers deserve to fully understand the compensation sought by their Buyers' Broker and REALTORS® are ethically bound to disclose any & all compensation.

Practical Implications for Sellers
Prior to the NAR Settlement, a seller/listing broker's offer of buyer agency compensation was published within our Multiple Listing Service that buyer's brokers could inform their clients and discuss any potential shortfalls. Rule #2 requires that MLS's no longer publish buyer agency compensation. As a result, your listing broker may ask you to complete Form 220 - Cooperating Compensation Agreement to be made available to buyer's brokers as they call to query any potential buyer agency compensation.

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