Understanding the New NAR Rules Effective August 17

Starting August 17, the National Association of REALTORS® (NAR) will implement significant changes affecting how broker commissions are displayed and how buyer’s agents conduct their business. One major update is that broker commissions will no longer appear on Multiple Listing Services (MLS) connected to NAR. Additionally, buyer’s agents must have signed agreements with their clients before showing any homes.

These changes, resulting from NAR’s commission lawsuit settlement may seem straightforward, but there are important details that both real estate professionals and clients should understand.

Guidance for Seller’s Agents
Under NAR’s Code of Ethics, REALTORS® are responsible for ensuring that their clients fully understand their options. While the broker decides whether to discuss the pros and cons of offering a commission to a buyer’s agent, it’s essential to recognize that such a commission can boost property marketing and potentially increase demand.

Agents can communicate about commissions in various ways—whether in person, by phone, via text, or through social media. However, these discussions must not occur on the MLS or through any third-party platforms trying to replicate the MLS.

Requirements for Buyer’s Agents
Beginning August 17, real estate professionals using the MLS must have a written and signed agreement with their buyer clients before showing any properties. This requirement includes virtual tours, where an agent provides a live walkthrough for a buyer who is not physically present.

The agreement must specify the compensation the buyer is willing to provide to the agent, either as a fixed dollar amount or a percentage of the total transaction. It’s crucial that the buyer’s agent does not accept compensation exceeding the amount outlined in the agreement.

What Homebuyers and Sellers Need to Know
A common misconception about the NAR settlement is that it will significantly alter how much clients pay for agent representation. In reality, REALTOR® commissions have always been negotiable, and this will remain the case after August 17.

Homebuyers and sellers will continue to have the flexibility to negotiate commissions with their agents through a flat fee or a percentage-based payment structure. Each consumer must determine what they consider a fair price for an agent's services and evaluate the value of professional representation.

With around 3 million licensed real estate agents in the U.S. and NAR having approximately 1.5 million members, buyers and sellers have many options for representation. Clients can choose to work with an agent or handle the transaction on their own.

Although studies show that clients who work with agents tend to be more satisfied with their home purchases and often secure better terms, the decision to work with an agent remains entirely up to the client.

Please refer to this comprehensive fact sheet for more detailed information on NAR’s settlement and the upcoming rules and regulations.