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NAR Corrects the Record About Commissions

NAR issued a statement following inaccurate media coverage that included the false representation or suggestion the association requires a 6% commission.

CHICAGO – The National Association of Realtors® (NAR) does not set commissions – they are negotiable. The rule that has been the subject of litigation requires only that listing brokers communicate an offer of compensation. That offer can be any amount, including zero. And other rules throughout the MLS Handbook and NAR policy expressly prohibit MLSs, associations, and brokers from setting or suggesting any such amount that should be included in that field.

The text of the current rule is linked here and excerpted below, the text of our MLS Antitrust Compliance Policy is linked here and excerpted below and a notice included in NAR’s MLS Handbook is below.

Again, the current rule that has been the subject of litigation does not set commissions.

As reflected in our release about the proposed settlement agreement, NAR has agreed to put in place a new MLS rule prohibiting offers of broker compensation on the MLS. Commissions remain negotiable, as they have been.

Excerpt from Handbook on Multiple Listing Policy – Commission/Cooperative Compensation Offers, Section 1: Information Specifying the Compensation on Each

Iowa Association of Realtors leader says proposed national settlement is a good thing

A proposed settlement of a lawsuit by the National Association of Realtors with home sellers clarifying sale details has drawn a lot of attention. The President of the Iowa Association of Realtors Shaner Magalhaes said the settlement will provide more clarity to transactions.

For example, there has always been a required disclosure statement for the seller, and the settlement would now require one for the buyer. “To just make it absolutely clear when I sit down with the buyer. I say, Okay, let’s go over this form. Here’s my responsibility to you. Here’s what I expect out of you in the process. And here’s how the compensation will work,” he says.

Another issue in the settlement is the practice of the agents for the seller and buyer sharing the commission on a sale. Magalhaes says that this is done to bring in more potential buyers, and some reports have incorrectly said that the practice will go away. “And that is absolutely not part of the settlement whatsoever. The settlement doesn’t say that they can’t continue to do that, it just has to be completely transparent and disclosed about how that system works,” he says. Magalhaes says the settlement will not

Local realtors break down $418 Million National Association of Realtors settlement

EVANSVILLE, Ind. (WFIE) – A settlement announced by the National Association of Realtors to the tune of $418 million has sent waves through the real estate world.

The big storyline is if the settlement is approved by a federal court, what’s being called an industry standard 6% commission goes away.

However, speaking to some local Tri-State players, like ERA Broker Liz Miller, that 6% number isn’t necessarily as standard as it seems.

“Every buyer and seller definitely has the option to negotiate out their commission. The only thing that this settlement really does is basically give the seller and the buyer more disclosure on how that is done and when that is done,” says Miller, “so those changes are really more kind of behind-the-scenes so to speak .”

Another big talking point has been transparency.

Gretchen Muchnick, the co-owner of FC Tucker Emge, says the State of Indiana is actually ahead of the curve on the two main points brought on by the settlement thanks to some prior legislation.

“The one is that a buyer-agency agreement is in place. Governor Holcomb has already signed that into law effective July 1. So that’s not new news for us,” says Muchnick, “the