Navigating the real estate landscape post-NAR settlement

by Jef Conn

The National Association of REALTORS’® (NAR) legal settlement of antitrust lawsuits regarding broker compensation will impact how Realtors operate and interact with clients in Texas and across the country. As we prepare for these changes, it’s essential to understand how they will shape the future landscape of real estate transactions.

We must remember that the core principles that have served Realtors and their clients for decades remain just as important as they were before. Research confirms that consumers who choose to work with Realtors find immense value in the services they receive. Nearly nine out of ten homebuyers and sellers expressed their willingness to work with their Realtor again, according to Texas REALTORS® 2023 Texas Homebuyers and Sellers Report. This speaks volumes about the trust clients have in the services their Realtors provide.

The real estate profession is no stranger to change. Over the years, technological advancements, market fluctuations and regulatory updates have reshaped the industry in numerous ways. However, the proposed NAR legal settlement brings about changes that directly affect the business practices of Realtors nationwide. There are two key changes introduced by this settlement that will affect most brokers.

First, the settlement prohibits multiple listing services (MLSs) from publishing offers of compensation to brokers representing buyers. Historically, offers of compensation were readily accessible to MLS participants. If approved by the court, the NAR settlement will require that any compensation arrangements between brokers be negotiated and agreed upon independent from the MLS. Offers of compensation will continue to be allowed to buyers’ brokers as a practice but must be made outside of the MLS. Experienced Realtors know that the value of the MLS goes beyond communicating offers of compensation. MLSs ensure access to reliable property data and enables widespread advertising of properties.

Second, the settlement requires brokers who are MLS participants working with buyers to enter into written agreements before touring homes. This introduces a new level of documentation to this business relationship, though many REALTORS have been using these types of agreements for years. Buyer representation agreements outline the scope of services provided, the terms of compensation and other essential details. Written representation agreements clarify the roles and responsibilities of the broker and the client from the outset, reducing the potential for misunderstandings or disputes later in the transaction.

In anticipation of approval of the settlement, the NAR MLS advisory board is working to implement new rules relating to the agreed-upon practice changes. In addition, Texas REALTORS assembled a task force of broker members from across the state to discuss changes to residential forms. Together with Texas REALTORS’ legal staff, broker members are considering forms changes in anticipation of NAR adopting official rule changes.

While there may be concerns about how these changes will affect the real estate industry, it’s important to dispel misinformation. There are no laws, rules or policies that set the amount brokers charge. Brokers have always had the ability to set their own fees and service offerings and buyers and sellers have always had the freedom to choose the representation that best suits their needs.

Under the settlement, compensation would continue to be negotiable and should always be negotiated between agents and the consumers they serve. Throughout the litigation, NAR has also maintained that there is nothing in its current policies that has increased costs for buyers or sellers. In fact, your REALTOR associations are working hard to address issues relating to housing affordability by advocating for measures such as lower property taxes, increases in homestead exemptions and increased housing supply.

As we navigate the path forward, Realtors’ commitment to serving their clients is a primary concern. Realtors will continue to use their skill and care to protect the best interests of the clients they serve. We know that together we can build a stronger, more resilient real estate industry for the future.

Jef Conn is the 2024 chairman for Texas REALTORS®.

Read More Related to This Post

Join the conversation

Oops! We could not locate your form.