The White Plains-based Hudson Gateway Association of Realtors (HGAR), which has the OneKey MLS (multiple listing service) says that changes in the rules for OneKey and HGAR resulting from the settlement reached by the National Association of Realtors (NAR) related to broker commissions are in effect as of August 8. As a result, HGAR has issued guidance for home sellers and home buyers regarding the changes.
The NAR agreed to pay $418 million to settle a class action lawsuit regarding real estate broker commissions. In the settlement, the NAR did not admit to any wrongdoing regarding charges of fixing broker commissions and causing them to remain artificially high. The NAR agreed to the settlement of claims against it, more than one million NAR members, all state/territorial and local Realtor associations, all association-owned MLSs, and all brokerages with an NAR member as principal that had a residential transaction volume in 2022 of $2 billion or below.
The NAR had created a cooperative compensation model rule that was introduced in the 1990s. As part of the settlement, NAR agreed to put in place a new MLS rule prohibiting offers of broker compensation on the MLS. This would mean that offers of broker compensation could not be communicated via the MLS.
“At HGAR we believe in being pro-active and informing our members and the public about how these new MLS rules will impact their home buying and selling procedures,” said Lynda Fernandez, HGAR’s CEO. “Consumers need to be fully aware of their options when choosing a listing agent to sell their home or working with a buyer’s agent when searching for a home. The key takeaway is that commission compensations are always negotiable.”
HGAR said the new rules mean sellers still have the choice of offering compensation to agents working for buyers, which can serve as a way of marketing the home or making the listing more attractive to buyers.
“Agents must also disclose in writing and obtain approval for any payment or offer of payment that the listing agent will make to another agent or broker who is acting for the buyers. The amount or percentage of payment must also be specified in writing,” HGAR said.
“If the seller does choose to approve an offer of compensation for the buyer’s agent, the listing agent cannot include it on the MLS. However, sellers can still offer buyer concessions (for example closing costs) on the MLS. Compensation to the listing agent remains fully negotiable,” according to HGAR.
HGAR said that people seeking to buy a property will need a written agreement with their agent before touring a home.
“Buyers can negotiate the terms of the agreement, which must include a written disclosure from the agent or broker stating that fees and commissions are fully negotiable and not set by law,” HGAR explained. “The homebuyer and agent must also sign an agreement about the specific amount or percentage of compensation that the buyer’s agent will receive. Written agreements apply to both in-person and live virtual home tours.”
HGAR explained that if a person seeking to buy a property is just speaking with an agent and at an open house or asking about services, the buyer does not need a written agreement.
“If the seller agrees to compensate the buyer’s agent, the offer cannot be shared on an MLS,” HGAR said. “Buyers can still accept concessions from the seller, such as offers to pay closing costs.”
