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NAR SETTLEMENT:Navigating the New Real Estate Commission Settlement. What Agents and Consumers Need to Know



the new real estate commission settlement - the truth about the NAR settlement

The real estate industry is facing a significant shift following the recent settlement reached by the National Association of REALTORS® (NAR). This change aims to address long-standing litigation concerning broker commissions and brings new rules that could impact both real estate professionals and consumers. Understanding these developments is crucial for navigating the future landscape of real estate transactions.



Background of the Settlement


In a landmark decision, NAR agreed to a settlement that resolves several lawsuits challenging the traditional structures of real estate broker commissions. Misinformation has clouded public understanding of this issue, so it's essential to separate fact from fiction. Contrary to some media reports, real estate commissions have always been negotiable, and NAR has never set standard commission rates. This settlement reaffirms that commissions remain negotiable and emphasizes transparency and choice in the real estate market.


Key Details of the NAR Settlement


  1. Settlement Amount: NAR will pay $418 million over four years, aiming to settle disputes without admitting any wrongdoing.

  2. Impact on Commission Negotiability: The settlement does not change the fact that commissions are negotiable. It reinforces that brokers and their clients have always had the freedom to determine their commission rates.

  3. Operational Changes: One significant change introduced by the settlement is the creation of new rules regarding how offers of compensation are communicated. Specifically, the settlement mandates that such offers should not be made through Multiple Listing Services (MLSs) but can still be negotiated directly.

What This Means for Real Estate Professionals


Real estate agents and brokers need to be aware of the changes that will take effect. Nearly all members of NAR are covered by this settlement, except for those affiliated with certain companies not included in the agreement. It's important for professionals to understand the specifics of the settlement to ensure compliance and to leverage this information when communicating with clients.


How the Settlement Affects Consumers


For consumers, the settlement ensures that they will continue to enjoy a transparent real estate market where they can freely negotiate commission rates. The preservation of cooperative compensation offers consumers flexibility in choosing how they compensate their agents, which can be particularly beneficial in a competitive market.


Preparing for the Changes


Real estate professionals should prepare for the implementation of the new rules by:

  • Educating Themselves and Their Clients: Agents should familiarize themselves with the settlement details and educate their clients about what these changes mean for buying or selling a home.

  • Adapting Business Practices: Agencies may need to adjust their business practices to align with the new rules, especially regarding how compensation offers are communicated.



While the NAR settlement brings significant changes to the real estate industry, it also provides an opportunity for professionals to refine their practices and enhance transparency for consumers. By staying informed and proactive, real estate agents can continue to provide valuable services to their clients, ensuring that both buyers and sellers have positive experiences in the real estate market.


For more detailed information and resources, real estate professionals and consumers are encouraged to visit the NAR website, which is regularly updated with the latest information regarding the settlement and its implications.


This adjustment period will be crucial for the industry, but with the right information and preparation, real estate professionals can navigate these changes effectively, continuing to protect the interests of their clients and maintain the integrity of the real estate market.

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