As an association, we will help you adapt to coming practice changes. As a skilled professional, you’ll play a vital role in communicating the truth about these changes to consumers.

By now, you’ve likely heard and read many stories about the National Association of REALTORS® proposed settlement to resolve nationwide claims brought by home sellers related to broker commissions. It’s important that you know the facts about the proposed settlement, which is why we have been blanketing members with emails, social media posts, podcast appearances and newsletter content. I hope you’ve found these resources helpful in understanding and digesting the settlement agreement details. In fact, I would encourage anyone who wants to truly understand the proposed settlement to read the full settlement agreement, which you’ll find posted at facts.realtor.

I strongly believe this outcome is the best we could achieve given the circumstances. Since this litigation started, our goal has always been to protect our members to the greatest extent possible while also preserving consumer choice. The proposed settlement achieves both goals. It also presents a path forward for NAR and allows our organization to continue providing unparalleled value to our members and American consumers. Some have criticized this settlement as being in the interest of the association rather than its members. The two go hand in hand. As a practitioner who has worked in real estate for more than 30 years, I have seen the unparalleled value NAR provides to its members and the industry. Whether it’s working to promote and preserve tax advantages for real estate purchasers, helping us fend off regulatory overreach, or defending the rights of property owners, our association operates with an effectiveness and integrity that is widely recognized and admired both in the U.S. and abroad. Anyone who has seen up close the many ways the association protects and advances our interests every day recognizes how important it is that NAR continue its mission.

The settlement would release well over 1 million NAR members and many industry stakeholders from liability in these matters. For those who were not included, I can say that there was no perfect option for resolving this litigation. NAR fought hard to include as many industry participants in the release of liability as we could. Ultimately, we could not persuade the plaintiffs to include the largest brokerages, particularly given the significant settlements that other corporate defendants had already reached. For most brokerages, the settlement provides a mechanism to obtain releases efficiently if those brokerages choose to use it. The settlement also calls for practice changes that will go into effect in around late July of this year. These include:

• Prohibiting offers of compensation on the MLS. Once the change goes into effect, consumers have the option to pursue offers of compensation off-MLS through negotiation and consultation with real estate professionals.
• Requiring MLS participants working with buyers to enter into written agreements with their buyers. NAR has long been an advocate for the use of written agreements as they can help consumers understand exactly what services and value will be provided, and for how much.

Since the settlement was announced, there has been no shortage of reporting on what it would mean for our association, the industry, and real estate professionals. I know that our members are adaptable and resourceful. Real estate is a relationship business, and each of us has a vital role to play in shaping how our industry evolves by communicating accurately about the practice changes and showing the value we bring to consumers and our communities.

This supplement brings you a few of the valuable resources available at facts.realtor and offers tips for talking with consumers about these changes. You can share your feedback with the magazine staff by sending an email to narpubs@nar.realtor(link sends e-mail). Your input will help us continue to provide the information and resources you need to find success through these changing times.

National Association of REALTORS®
Reprinted with permission

You can help correct the record about the association’s proposed settlement to resolve nationwide claims brought by home sellers.

National Association of REALTORS® leaders have been talking to reporters and members full-time over the past month to correct the record about the association’s decision to resolve nationwide claims brought by home sellers. You can help by challenging inaccurate information that you see appearing in social media posts, news articles or elsewhere.

Myth 1: The proposed settlement covers only a fraction of members.

FACT: Nearly every real estate professional who is a REALTOR®, a member of NAR, is covered by the release that NAR negotiated in the settlement. The agreement would release NAR; more than 1 million NAR members; all state, territorial and local REALTOR® associations; all association-owned MLSs; and all brokerages with an NAR member as principal whose residential transaction volume in 2022 was $2 billion or below from liability for the types of claims brought in these cases on behalf of home sellers related to broker commissions.

To be clear, NAR members are covered by the settlement unless:

• They are affiliated with HomeServices of America or one of its affiliates, or
• They are employees of a defendant in the remaining Gibson/Umpa lawsuits in Missouri. (Note: All independent contractors affiliated with these defendants are covered.)

Myth 2: NAR left large corporate brokerages and affiliated agents to fend for themselves.

FACT: NAR fought to include as many people and companies in the release as possible and achieved a release for everyone it could. Well over 1 million members are covered, as are tens of thousands of businesses operated by REALTORS®. But, despite NAR’s efforts, the plaintiffs did not agree to include everybody. Those that are not released — the largest companies in our industry — are no worse off now than they were before the settlement. In fact, many are better off, as thousands of their independent contractor real estate agents are released by the settlement. Additionally, NAR’s settlement provides an avenue for most large corporate brokerages with an NAR member as principal and more than $2 billion in residential volume in 2022 that were not included in the settlement to pursue inclusion in the release. But the settlement does not obligate them to opt into the settlement. These brokerages will have 60 days after plaintiffs file the motion for preliminary approval of the settlement to complete Appendix C of the settlement agreement, which is required to opt into the settlement if they choose to do so. (See the estimated timeline and download the settlement and its appendices at facts.realtor.)

Myth 3: NAR requires a standard 6% commission.

FACT: You know this is untrue, but it’s a myth that has persisted in the media. NAR does not set commissions — they are negotiable. The rule that has been the subject of litigation requires only that listing brokers communicate an offer of compensation. That offer can be any amount, including zero. And other rules throughout the MLS Handbook and NAR policy expressly prohibit MLSs, associations and brokers from setting or suggesting any such amount that should be included in that field.

Myth 4: NAR will raise dues to fund the settlement.

FACT: NAR will not change membership dues for 2024 or 2025 because of this settlement.

Myth 5: Brokers representing buyers now have to work for free.

FACT: Under the proposed settlement, the types of compensation available for brokers working with buyers would continue to take multiple forms, including but not limited to a fixed-fee commission paid directly by consumers; concessions from the seller (as long as such concessions are not conditioned on the retention of or payment to a cooperating broker, buyer broker, or other buyer representative); or a portion of the listing broker’s compensation. NAR has long believed that it is in the interest of the sellers, buyers, and their brokers to make offers of compensation; however, using the MLS to communicate offers of compensation will no longer be an option. Compensation will continue to be negotiable and should always be negotiated between agents and the consumers they represent.

Myth 6: The practice change will do away with offers of compensation to brokers representing buyers.

FACT: Offers of compensation are an option consumers can pursue off-MLS through negotiation and consultation with real estate professionals. The settlement also expressly provides that sellers may communicate seller concessions — such as buyer closing costs — via the MLS, provided that such concessions are not conditioned on the use of or payment to a buyer broker.

Myth 7: NAR settled because the plaintiffs’ allegations are true.

FACT: As the settlement makes clear, NAR denies any wrongdoing in connection with the MLS cooperative compensation model rule. Cooperative compensation arrangements facilitate the process of selling a home and help ensure equal opportunity for buyers. It has always been NAR’s goal to resolve this litigation in a way that preserves consumer choice and protects our members to the greatest extent possible. This settlement achieves both of those goals and provides a path forward for the industry and the association.

National Association of REALTORS®
Reprinted with permission

After his yard sign was defaced, a Georgia agent stayed positive and focused on turning the incident into a teachable moment for the industry.

It was early September 2019 and I was in the midst of a normal, busy day in the office, surrounded by paperwork. I’m the only millennial that I know of to reject paperless progress, and this “organized chaos” has been my life since I got into real estate 16 years ago and refused to take my first broker’s advice to change my look and assimilate into the crowd.

Yes, I’m gay, and I don’t hide who I am. I went against the advice of that broker and gave away Blair dolls and Blair-branded balm and wrapped three Prius cars with my image. All this helped get me cast in “Like a Boss” on Oxygen TV, and I was Honey Boo Boo’s agent on TLC. Now that was a blast!

I also became the highest-ranked transaction closing agent in Georgia and the only agent in the central part of the state to ever rank in REAL Trends’ “The Thousand” list. I can’t go many places in the Macon and Warner Robins, Ga., region without being recognized. People are usually friendly, but when I’ve encountered negative opinions about me, I’ll often use humor to deflect them.

So around Labor Day, I was working feverishly, answering my iPhone when my assistant walked in, carrying one of my yard signs with its back facing me. He was hesitant to flip it around. Someone had scrawled on the sign in red paint: “F—k you fag.”

The listing was in a rural area, and the 64-year-old woman selling was upset when she saw it. The sign was on a main road where it meets the dirt driveway leading to her property. She took it down and called us. My assistant replaced the sign right away.

This was the most directly hateful thing I have experienced while working in real estate. But I chose to turn it into a positive experience and share what happened within the industry. I created a post on the members-only Facebook page of the National Association of Gay and Lesbian Real Estate Agents. I wasn’t looking for sympathy, but I was interested in connecting with others who’ve been targeted.

It was eye-opening to learn that I was not alone. “I’m so sorry. It’s something that we are going to always have to deal with,” wrote one person. “I’ve had this happen to me in my small town,” said another.

After the post, the Georgia Association of REALTORS® sent a memo to its members reminding them of Article 10 in the NAR Code of Ethics. It notes that “REALTORS® shall not be parties to any plan or agreement to discriminate against a person or persons on the basis of race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity.”

Acknowledging that both blatant and subtle discrimination exist should be a core part of every brokerage’s mission. LGBT agents and others from diverse groups who experience discrimination may not be performing as well as they could. It’s important that agents receive training to raise awareness about the biases that agents and clients potentially face because of their background or culture.

A few other tips:

• Ask questions. If you approach people showing genuine interest in a nonjudgmental way, most will be eager to help you understand.
• Be an ally. While the word “ally” has long been used in the LGBT community to recognize supportive heterosexuals, it can apply to any diverse group. Be supportive. It means a lot.
• Follow the golden rule. It sounds simple yet is easy to forget. Treat others as you would have them treat you. We can’t work effectively with each other and with clients without kindness.

I have loved my career in real estate. We’re able to make it what we want it to be. By being open about who we are, we enrich our communities and learn about ourselves and those we serve. Let’s use what happened to my sign as a means to spur dialogue around diversity and help society overcome bias.

National Association of REALTORS®
Reprinted with permission

NAR members and REALTOR® associations must implement the practice changes stemming from NAR’s proposed settlement agreement fully and in good faith.

Consumer choice is paramount, particularly when it comes to determining the nature and cost of professional representation in a real estate transaction. As such, it is deeply concerning to see others take positions on listing agreements and offers of compensation that would harm consumers by leaving them with less choice than ever before.

Form agreements serve as a positive foundation for real estate professionals to engage in clear and open conversations with consumers about the full range of choices when it comes to professional representation and compensation. Ahead of the Aug. 17 practice change implementation date, NAR encourages associations and other form providers to address form updates early and educate real estate professionals to ensure they can confidently engage with consumers about what the practice changes and form agreements mean for consumers. To be clear, NAR opposes any attempts to circumvent the settlement: Members and associations must implement the practice changes fully and in good faith, doing so with the goal of promoting consumer empowerment, consumer choice, and healthy competition.

Offers of compensation also remain an important option available to consumers. Under NAR’s proposed settlement related to broker commissions, home sellers can continue to choose to offer compensation to the buyer’s broker off-MLS. Offers of compensation help make homeownership and the benefits of professional representation more accessible to buyers, including first-time home buyers, increase homeownership opportunities for historically underserved groups, and benefit sellers by expanding the potential buyer pool.

The ability for listing brokers to make an offer compensation to a buyer broker has significant implications for buyers who struggle to come up with cash to make it to the closing table. Proposals to limit or eliminate this option would put an additional strain on their finances, resulting in these buyers sitting out of the housing market or going through the biggest transaction of their lives without professional representation. There are those who suggest the onus should be put on buyers to ask for compensation for their agent as part of their offer. Competing against multiple offers, cash buyers, and investors, a first-time buyer or a buyer lacking generational wealth will see such an offer move to the bottom of the pile. Other suggestions—for example, that buyers bid up the home price in order to win a concession from the seller—will have the perverse effect of driving up home prices in the midst of a housing shortage and historic affordability crisis.

Members and consumers are encouraged to visit facts.realtor(link is external) for more information on the proposed settlement, including NAR’s overviews of how buyers and sellers can prepare for how the settlement practice changes will impact their home buying and selling experiences

National Association of REALTORS®
Reprinted with permission

Despite big changes ahead, NAR’s president Kevin Sears is confident that members will adapt.

A new day is approaching: Changes are coming to the way many of us do business. As of Aug. 17, we will be required to have written agreements with buyers before we tour a property with them, and offers of cooperative compensation will be prohibited on MLSs.

NAR’s Legal Affairs team spells out what you need to know about written buyer agreements. As far as offers of compensation go, as always, it’s up to each of us to negotiate what compensation we receive for our work and communicate the value we deliver. Complying with these rules will require open dialogue between listing agents, buyer’s agents and consumers. Fortunately, ours is a relationship business, and I’m confident we’ll adapt.

I encourage you to begin implementing these rules now so that when Aug. 17 rolls around, you’ll be able to approach them with confidence and a clear understanding of, and belief in, your value.

National Association of REALTORS®
Reprinted with permission

You can help correct the record about the association’s proposed settlement to resolve nationwide claims brought by home sellers.

National Association of REALTORS® leaders have been talking to reporters and members full-time over the past month to correct the record about the association’s decision to resolve nationwide claims brought by home sellers. You can help by challenging inaccurate information that you see appearing in social media posts, news articles or elsewhere.

Myth 1: The proposed settlement covers only a fraction of members.

FACT: Nearly every real estate professional who is a REALTOR®, a member of NAR, is covered by the release that NAR negotiated in the settlement. The agreement would release NAR; more than 1 million NAR members; all state, territorial and local REALTOR® associations; all association-owned MLSs; and all brokerages with an NAR member as principal whose residential transaction volume in 2022 was $2 billion or below from liability for the types of claims brought in these cases on behalf of home sellers related to broker commissions.

To be clear, NAR members are covered by the settlement unless:

• They are affiliated with HomeServices of America or one of its affiliates, or
• They are employees of a defendant in the remaining Gibson/Umpa lawsuits in Missouri. (Note: All independent contractors affiliated with these defendants are covered.)

Myth 2: NAR left large corporate brokerages and affiliated agents to fend for themselves.

FACT: NAR fought to include as many people and companies in the release as possible and achieved a release for everyone it could. Well over 1 million members are covered, as are tens of thousands of businesses operated by REALTORS®. But, despite NAR’s efforts, the plaintiffs did not agree to include everybody. Those that are not released — the largest companies in our industry — are no worse off now than they were before the settlement. In fact, many are better off, as thousands of their independent contractor real estate agents are released by the settlement. Additionally, NAR’s settlement provides an avenue for most large corporate brokerages with an NAR member as principal and more than $2 billion in residential volume in 2022 that were not included in the settlement to pursue inclusion in the release. But the settlement does not obligate them to opt into the settlement. These brokerages will have 60 days after plaintiffs file the motion for preliminary approval of the settlement to complete Appendix C of the settlement agreement, which is required to opt into the settlement if they choose to do so. (See the estimated timeline and download the settlement and its appendices at facts.realtor.)

Myth 3: NAR requires a standard 6% commission.

FACT: You know this is untrue, but it’s a myth that has persisted in the media. NAR does not set commissions — they are negotiable. The rule that has been the subject of litigation requires only that listing brokers communicate an offer of compensation. That offer can be any amount, including zero. And other rules throughout the MLS Handbook and NAR policy expressly prohibit MLSs, associations and brokers from setting or suggesting any such amount that should be included in that field.

Myth 4: NAR will raise dues to fund the settlement.

FACT: NAR will not change membership dues for 2024 or 2025 because of this settlement.

Myth 5: Brokers representing buyers now have to work for free.

FACT: Under the proposed settlement, the types of compensation available for brokers working with buyers would continue to take multiple forms, including but not limited to a fixed-fee commission paid directly by consumers; concessions from the seller (as long as such concessions are not conditioned on the retention of or payment to a cooperating broker, buyer broker, or other buyer representative); or a portion of the listing broker’s compensation. NAR has long believed that it is in the interest of the sellers, buyers, and their brokers to make offers of compensation; however, using the MLS to communicate offers of compensation will no longer be an option. Compensation will continue to be negotiable and should always be negotiated between agents and the consumers they represent.

Myth 6: The practice change will do away with offers of compensation to brokers representing buyers.

FACT: Offers of compensation are an option consumers can pursue off-MLS through negotiation and consultation with real estate professionals. The settlement also expressly provides that sellers may communicate seller concessions — such as buyer closing costs — via the MLS, provided that such concessions are not conditioned on the use of or payment to a buyer broker.

Myth 7: NAR settled because the plaintiffs’ allegations are true.

FACT: As the settlement makes clear, NAR denies any wrongdoing in connection with the MLS cooperative compensation model rule. Cooperative compensation arrangements facilitate the process of selling a home and help ensure equal opportunity for buyers. It has always been NAR’s goal to resolve this litigation in a way that preserves consumer choice and protects our members to the greatest extent possible. This settlement achieves both of those goals and provides a path forward for the industry and the association.

National Association of REALTORS®
Reprinted with permission