Updates for EMTAR Members on the NAR Settlement
*Updated April 9, 2024*
By now our EMTAR members are likely well aware of the NAR settlement agreement announced March 15. As the dust settles a bit, we wanted to provide an update on what the settlement includes, how it may affect you as a local REALTOR®, and the impact on the buyers and sellers you serve throughout Eastern Middle Tennessee.
News of the settlement proposal took the industry by surprise, but our leadership immediately began to think through how EMTAR can and will support our members, your clients, and the protection of private property rights as it unfold.
While the proposed settlement is just that—a proposal that will require court approval and take effect over a period of months—we know it’s important to take steps now to prepare for what we anticipate.
For starters:
As with any changes in our industry, we all want to learn the facts and assess the future. You as a REALTOR® have the opportunity to thrive as these changes develop. Here are several areas you can focus on right now:
Understand Buyer’s Representation Agreements. The proposed settlement calls for those agreements to be required before showing any property.
Listing agents, communicate clearly how the buyer’s agent can be paid, how sellers can take part, and the potential impact to the seller.
Make buyer consultations a part of your business (if you don’t already) in the same way you’ve done with sellers. Have a well-prepared presentation that defines your value and your fee.
Sharpen your mindset. View this proposal in light of the opportunities it presents to grow and thrive.
Now, more details about the agreement:
While the settlement is subject to court approval, the proposal would resolve claims against NAR; more than one million NAR members; all state, territorial, and local REALTOR® associations; all association-owned Multiple Listing Services (MLSs); and all brokerages with an NAR member as principal that had a residential transaction volume in 2022 of $2 billion or below.
As part of its initial announcement, NAR said, “The agreement makes clear that NAR continues to deny any wrongdoing in connection with the Multiple Listing Service (MLS) cooperative compensation model rule (MLS Model Rule) that was introduced in the 1990s in response to calls from consumer protection advocates for buyer representation. Under the terms of the agreement, NAR would pay $418 million over approximately four years.”
While the agreement would cover a majority of REALTORS®, it does not cover brokerage firms with residential transaction volume above $2 billion in 2022, despite NAR’s effort to include them. However, for those companies, the settlement provides an avenue to pursue inclusion in the release but does not obligate them to do so.
Next, here are two primary changes that are likely to result:
Offers of compensation moved off of the MLS
NAR has agreed to implement a rule that prohibits offers of compensation in the MLS. Offers of compensation could continue to be an option consumers can pursue off-MLS through negotiation and consultation with real estate professionals. In addition, sellers may offer buyer concessions on an MLS (for example—concessions for buyer closing costs). This change is set to go into effect in mid-July of 2024.
Written agreements required for MLS participant buyers
NAR has already championed the use of written agreements for years. In the settlement, NAR has agreed to require MLS participants working with buyers to enter into written representation agreements. This change also is expected to take effect by mid-July of 2024.
Finally, here are several steps we are taking as your local association to help support you during this time:
Tennessee Forms Updates
As noted above, NAR has agreed to require MLS participants working with buyers to enter into written buyer representation agreements. In light of that, we will collaborate with our state association, Tennessee REALTORS®, to ensure that EMTAR members have access to the forms you may need based on the new requirements. Also as noted, this change is likely to go into effect in mid-July 2024. For the moment, we don’t have a specified date for forms changes, but we will stay on top of this and make any adjusted forms available to you when the time comes.
Changes to the Realtracs MLS
We’re also staying in touch with Realtracs about changes the MLS will need to make in light of the settlement. As you read above, NAR has agreed to adopt a rule that prohibits offers of compensation on the MLS. Consumers could continue to pursue those offers off-MLS, through negotiation and consultation. In addition, sellers could offer buyer concessions within an MLS (e.g., buyer concessions for closing costs). We don’t have a target date for Realtracs changes, since the settlement is pending court approval, but we will communicate to you on this as any changes emerge.
MLS Webinar, Wednesday, March 27, 1:00 PM
Realtracs will hold a webinar Wednesday, March 27, at 1:00 PM, on the proposed NAR settlement. Brian Schneider, Realtracs’ legal counsel, will discuss the settlement’s implications and field questions. The webinar is open to all Realtracs customers (which includes EMTAR) and will be recorded. Please register here.
CE and Professional Development Opportunities
As your partner in success, EMTAR continually seeks to make continuing education (CE) and other professional development available to you.
Among other things, the NAR settlement proposal underscores that negotiation skills will be more important than ever. We are working on local courses, as well as connecting you with national and other course opportunities. Please check our EMTAR education page and stay tuned for new classes as they become available.
For one, EMTAR is providing FREE ABR® designation classes, and while the first class in April is at max capacity, we will be providing more opportunities. Please keep an eye on our Upcoming Courses page.
As another option, throughout 2024 NAR is making the popular Accredited Buyer’s Representation (ABR) designation course, typically $295, available at no cost. Take the first step toward earning your ABR designation at become.abr.realtor.
For More Information…
If you have questions about the settlement, you may visit NAR’s central resource at www.facts.realtor (you’ll need to log in with your NAR credentials) and/or visit any of these resources:
The Truth About the NAR Settlement
Tim Hur Fortune magazine Op-ed article: “90% of homebuyers have historically opted to work with a real estate agent or broker. Here’s why that’s unlikely to change, according to the National Association of Realtors”
Fostering Consumer-Friendly Real Estate Marketplaces
Kevin Sears on Real Estate Today Podcast Discussing the NAR Settlement
Kevin Sears: Video Update from the Road in Wyoming
Thank you for your patience and perseverance as we navigate what the NAR settlement means and the effects it will have moving forward. We greatly appreciate you and the difference you make as an EMTAR member and a valued part of our community!
