04/12/24

Real Estate Insights

A Note About The NaR Settlement

We want to express our gratitude to everyone who has reached out with questions regarding the recent NAR settlement agreement that has been making headlines. We understand that there has been a lot of confusion surrounding this topic, so we’re here to provide clarity and break down the details for you.

For those of you unaware, on March 15, 2024, there was a significant development in the real estate landscape with the announcement of a proposed settlement agreement by the National Association of REALTORS® (NAR) to address litigation related to federal antitrust conspiracy claims. 

Let’s explore some of main points that are coming out under this settlement:

Compensation Offers Off the MLS: Let’s say a broker charges a 6% listing commission to their seller and agrees to offer 3% of that commission to a buyer’s agent.  One important change in the settlement involves prohibiting this offer of compensation on the Multiple Listing Service (MLS). However, this doesn’t mean compensation offers will disappear altogether. Sellers and listing agents can still offer compensation to a buyer’s broker through other means like their own marketing materials or direct communication with other real estate professionals. Additionally, sellers can still provide concessions for buyer closing costs on the MLS, which can in turn cover a buyer’s brokerage fees.

Written Buyer Agency Agreements: Another significant change is the requirement for MLS participants working with buyers to have written representation agreements with their clients. This ensures transparency and clarity in the relationship between real estate professionals and buyers. 

Contrary to common misconceptions, there has never been a nationwide, statewide, or local standard commission rate in the real estate industry. While certain rates may be common in specific markets, commissions have always been negotiable, with each firm setting its own rates and services offered.

Wisconsin’s real estate landscape has some unique features compared to other states. For example, under current law, Wisconsin licensees are required to use state-approved forms, many of which already align with the pro-consumer policies addressed in the NAR settlement agreement. Additionally, Wisconsin has long emphasized and required written buyer agency agreements, providing clarity on commissions and compensation in real estate transactions.

Despite these changes, the value of REALTORS® in real estate transactions remains unchanged. REALTORS® continue to assist buyers and sellers by marketing and showing homes, handling paperwork, interpreting market data, managing deadlines, and offering insights into the real estate market….just to name a few.

The settlement agreement does not impact inventory levels, market competitiveness, transaction complexity, or the importance of homeownership for consumers. Instead, it aims to improve transparency and consumer protection in real estate transactions.  Our company has always made a point to provide VERY transparent brokerage services to our clients and customers through candid conversations and walking through the real estate paperwork and process in great detail with our buyers and sellers.

In conclusion, while the NAR settlement agreement brings about some changes, we anticipate fewer significant changes here in Wisconsin. Nevertheless, the essential role of REALTORS® in facilitating successful real estate transactions remains unchanged. As always, buyers and sellers can rely on the expertise and professionalism of REALTORS® to guide them through every step of the process.

Thank you for your continued trust and support.