New Rules after NAR Settlement, effective NOW!

Big changes are happening in real estate because of a recent settlement with the National Association of REALTORS® (NAR). So, on March 15, 2024, NAR reached a nationwide settlement that affects how commissions are handled, especially for home sellers. The lawsuits aimed to get rid of the commission-sharing policy, and now, some new rules are coming into play, especially with the Houston Association of Realtors (HAR) MLS, starting August 17, 2024, which is this Saturday.

So, what’s changing? Let me explain.  First off, a new rule is prohibiting offers of compensation on the MLS. I want to be clear that I said “ON THE MLS”.  MLS is short for Multiple Listing Service such as HAR or Houston Association of REALTORS®, which is what we use here in Houston and surrounding areas.  This means that brokers and agents will now need to negotiate their commission directly with their clients—it just won’t be listed on the MLS anymore. Compensation can still be offered by the seller.

Another thing to note: that a 6% commission being the industry standard? Not true. Commissions have always been negotiable, and that’s not changing.

Now, here’s an important change for buyers: NAR will now require agents to have a written agreement with their buyers before touring homes. This means you’ll have a clear discussion about what the agent will do for you and what your obligations are, right from the start. We’ll talk about the compensation amount and how the agent earns that.  It’s all about making sure everyone is on the same page and understanding the value that agents bring to the table.

There’s also been some buzz about whether buyer agents will disappear because they’re “not getting paid anymore.” That’s not the case! Listing brokers and sellers can still offer compensation for buyer broker services—it just can’t be broadcasted on the MLS anymore. Starting August 16, HAR will remove all those compensation fields from the MLS.  As a buyer agent, I will have a behind the scene discussion with the Listing agent about the compensation to understand what’s being offered. 

And for sellers, there’s a new option: you can now contribute toward buyer expenses, like closing costs. The MLS has a new field for seller contributions to make this clear upfront.

Bottom line? Sellers can still offer compensation to buyer agents; it just won’t be shown on the MLS like before. This change might feel a bit different, but it’s all about transparency and ensuring everyone understands the process. Be sure to talk with your trusted real estate expert if you have any questions or concerns. I included the link where you can find more information.