• Before the policy changes, agents were typically required by the MLS to offer the co-broke (although the amount has always been negotiable) in the MLS.
• Agents and brokers are permitted to advertise buyer agent compensation through any platform available as long as it is not affiliated with the MLS (their own websites, etc.)

• If a co-broke is being offered, the amount you agree to pay your buyer’s agent can be completely or partially covered if a buyer agent fee is being offered.
• You can also negotiate for full coverage of that compensation when submitting offers if no buyer’s agent compensation is being offered or if the amount offered is less than agreed to between the buyer and their agent.
• The amount negotiated between the buyer and their agent is the MAXIMUM amount that agent can be paid.
  • As an example, lets just say you you agree to show a family member a house, and you write the agreement (either for agency or compensation) with less than the amount you typically charge a buyer to stay in compliance and then submit an offer on a property. That particular seller happens to be offering a generous buyer agent fee which sounds great for your relative/agent, except, the amount they agreed to prior to the showing is the most that they can accept.
  • It’s not talked about much, but contracts and agency relationships can be ratified/amended any time. Legal guidance does not appear to be widely available about this topic, but nothing about contracts is set in stone (buyer agency is formed through a contract) if all parties to the contract agree to change it. Possibly muddy water, but worth noting.
• Buyer Agency relationships should have always been in writing so many will say the change has little significance. The statement is true, but the opinion on significance is a widely varying opinion.

• In many cases the changes are minimal and limited to certain sections, but the Pennsylvania Association of Realtors (PAR) had a lot of revisions to make and Realtors have had a lot of review to do to stay current.
• Fun Fact, our local MLS platform (FLEXMLS) also did away with their forms section where agents would enter data, forcing a platform switch just weeks ahead of all of the updates. This is not whining in any way, and not really a part of the policy changes, but it certainly put a lot on your agents plate in terms of practices to change and data to familiarize yourself with.

• These are strictly rule changes that funnel down from the National Associate of Realtors to the State realtor associations, then on to the local realtor associations who operate many of the MLS services.
• If you are not a member of the National Association of Realtors then technically none of this applies to you.

• That is technically true based the information published.
• Commercial contracts and forms changed right along with with the residential forms and contracts so there was at least some impact.
• Commercial agents that are members of the NAR and were also members at the local level to be part of the MLS (very common in smaller markets, less so in larger markets) were required to publish co-brokes (again, amount was negotiable) and they are now no longer obligated or even allowed to publish that information in the MLS (same as a residential agent working on a residential transaction). This again points to an impact on at least some Commercial Realtors/Commercial transactions.

• All of this is centered around Antitrust. In short, Antitrust is some kind of action taken to drive up or maintain high prices on goods or services or just control prices in general (yes, that is a simplification of a complicated topic).
• The lawsuit basically states that requiring Realtors to offer/publish buyer agency compensation throughout their membership (1.5 Million + members) the NAR was effectively forcing elevated commissions.
  • The NAR does not admit guilt, but agreed to pay a heft settlement and change policies (while still maintaining the viability of buyer agent compensation from the seller)
  • The renders opinions that the courts consider and the general point of view from the DOJ and the end goal has been ‘de-coupling’ which would eradicate sellers offering compensation to a buyers agent all together.

• Opinions vary as to the impact or relevance to daily practices.
• Extremists on either side shout doom and gloom and the end of the industry as we know it, while others see little to no change.
• No one knows what effects this will have on markets, the industry, commissions, etc. in the long term. We will all just have to wait and see.

• That’s right – all of this is going on and the final hearing to formally accept the settlement is not scheduled until November 26th
• The settlement has received preliminary approvals and those involved seem optimistic that it will get across the finish line.

• Theories exist from both sides regarding commissions. The claim of the initial lawsuit was that the NAR is propping up commission rates because of their sizable membership so that is the intention of the original action.
  • Truthfully, commission rates have always been negotiable and they continue to be.
  • Requirements for buyer’s agents to negotiate their worth ahead of property listings and removal of any sort of guarantee that they will be compensated by the seller may make survival more difficult for those agents, which would reduce the number of agents, which could in theory drive rates up. This is a stretch, as there are A LOT of realtors, but the principles apply.
  • No one really knows for sure at this point, but we will all find out together over the coming weeks, months, and years
• Buyers agency will change, but that does not necessarily mean it will become obselete.
  • Several agents have made the claim that they have always used a buyer’s agency agreement for every buyer so nothing changes for them. They are likely being truthful as that is good practice and what we are all taught.
  • A fundamental difference is the buyer perception. Entering into a buyer agency relationship where compensation is specified is more comfortable for a buyer when the reality is there is a very good chance the seller’s agent will be paying all or a large portion. Once that perception shifts, buyers could become less comfortable with those arrangements and attempt to go it alone.
  • Each agent will have to understand and explain their individual strengths in this field to secure clients.
  • Buyer’s agency put a working professional in your corner that operates for you as a fiduciary (similar to a lawyer in their duties to you) and that is very beneficial. Not all agents are equal, in any side of a transaction so each buyer will have to evaluate each agent for each transaction.

The proposed NAR Settlement has made it through the courts. Now it is back to business. Truthfully, nothing came to a screeching halt while this was unfolding. The preliminary settlement provided time to implement changes, so we, as realtors, are already settled into our new reality. Curiously, the Department of Justice, while not objecting to the terms, has issued a statement. In their statement they essentially give notice that this was a civil matter and that the terms of the settlement have no bearing on potential future Antitrust actions that can be taken. This applies to the previous methods of operation and the new rules that have been implemented.