Updated August 5, 2024
NAR's Settlement and the MLS
You may be aware that the National Association of Realtors® (NAR), on behalf of residential real estate practitioners, has entered into a settlement agreement with plaintiffs that would end litigation of claims brought on behalf of home sellers related to broker commissions across the United States.
This residential-focused settlement now has preliminary approval which is a strong marker that it will gain final approval. The agreement would release NAR, over one 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 many national cases on behalf of home sellers related to broker commissions.
While the NAR-negotiated settlement does not include commercial practitioners within their commercial practice, it is important to be aware of the details to understand the widespread changes happening in our industry, and some impacts for SCCMLS that will ensure we are responsive to the litigation claims. Of course, if you also practice residential real estate, it is vital that you explore the specific details at CHSMLS.com here.
Know the Facts
Whether or not you are a Realtor® member, educate yourself on the facts around this settlement, which will have a large impact on our industry as a whole. In an effort to focus here solely on the MLS effects of the settlement, we won't recreate resources posted elsewhere. We encourage you to read the materials from the source.
To explore the material that NAR has posted, explore their Facts for Realtors® webpage. You might also like to jump straight to their extensive FAQs.
So...what's changed with SCCMLS?
The settlement terms (as negotiated by NAR for residential real estate transactions) include discontinuing the inclusion of a listing broker's offer of buyers agent compensation in the MLS platform (or any similar platform).
While commercial transactions are not included in the settlement terms, SCCMLS, upon the advice of counsel, believes that removing the compensation field set from MLS Listing Input in the commercial database is advisable under the current legal landscape surrounding a listing brokers offer of buyer agent compensation.
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As such, SCCMLS removed the compensation fields from the SCCMLS database on August 5, 2024.
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Should a seller instruct their listing brokerage to offer compensation to a buyers agent, the compensation negotiation may still take place outside of the MLS, as it often does now in commercial negotiations.
The result of this change will be more discussion, transparency, and collaboration between all parties, and is a required term negotiated by NAR in the national settlement for all residential MLSs.
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It is important that SCCMLS members do not attempt to manipulate listings to insinuate what an offer of compensation may be. That practice would only make this transition more difficult for our industry. Do not use public or private remarks, photos, documents, or any other field.
Frequently
Asked
Questions
We recommend that you also explore NAR's FAQs which are very specific to why they entered into this settlement, who is covered, recommendations for compensation and buyer broker agreements, and NAR operations going forward. Whether or not you are a Realtor® member, the information offers some clarity for our industry.
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If you have questions on form changes required to meet the terms of the settlement, visit the South Carolina Realtors® FAQs, as SCCMLS does not manage the forms in Zipforms.
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If the settlement is based on residential transaction claims, why is it impacting us?
Although commercial real estate professionals are not specified in the settlement, SCCMLS and its legal counsel, believe that proactively removing the offer of compensation fields from the MLS is necessary as a reaction to the legal climate.
Are all of these details final?
The settlement agreement directly affecting residential real estate has preliminary approval. Final approval is scheduled to be granted in November (although residential changes are scheduled to launch late Summer, 2024) - find those details at CHSMLS.com/narsettlement.
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When will the compensation fields be removed from SCCMLS?
The compensation fields were removed from SCCMLS on August 5, 2024.
Can my seller still offer compensation to the buyer broker?
Yes. Ensure that your commission details (always - for list or buy side) are transparent and negotiable, and that your client is fully educated on those details. Do not add the offer of compensation into your MLS listing.
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Can my seller's offer of compensation be entered on my listing in the MLS?
No.
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If I have an on-market listing, will the compensation info automatically be removed? ​
Yes. Removing the compensation fields also removed existing compensation data on any on-market and off-market listings in the SCCMLS database. However, if you had added compensation info in the Remarks or Notes fields, that would need to be removed manually.
Do I need to change anything in my business?
Check with your Broker-in-Charge to see if there are any brokerage-level changes being implemented now as a reaction to the settlement. It may already be standard practice in your commercial real estate business that you are transparent with your clients on your fee, how you are paid, that the fee is negotiable, and that you bring strong value to the deal. Continue those practices and continue careful document negotiation and review as you do now. As always, consult your BIC and legal counsel with concerns.
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What if my clients ask about the lawsuit(s)?
We recommend sharing the NAR resource page Facts for Realtors® as a way to offer a high level overview of the Sitzer/Burnett case facts. As necessary, involve your Broker-in-Charge and legal counsel.
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Where can I find more information?
If there are any commercial-relevant updates, we will post on this page. Also, keep an eye out for SCCMLS emails (let Support@SCCMLS.com know if you don't receive our monthly newsletters). You can find the full settlement details at NAR's Facts for Realtors® and Frequently Asked Questions page, where they are posting regular updates as well.
Our Commitment to You
We are committed to providing you with the most advanced tools and technology to support your real estate practices, especially in these challenging times. Our MLS platform is continuously updated to ensure you have access to the best resources for listing, marketing, and data analysis. As we navigate the implications of the settlement, we will also explore how our technological solutions can be adapted or enhanced to align with any new industry standards or regulations that may emerge.
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Our priority remains to empower you with the resources you need to succeed in your real estate endeavors.