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NAR Settlement

TIMELINE PRACTICE CHANGES BUYER AGREEMENTS RESOURCES

We are here to help our members understand and implement the changes required by the approved NAR settlement, which will go into effect in PMAR’s MLS System starting August 12th. We are committed to being the best possible resource for our REALTOR® members. This page will provide you with many of the tools you need to navigate this transition. Please bookmark this page now and check back frequently.

PMAR Timeline

8/1/2024 – Updated PAR Forms will be live.

8/7/2024 – PAR Webinar on Standard Forms Updates.

8/8/2024 – PMAR Updates Webinar.

8/12/2024 – Compensation fields are removed from FlexMLS.

8/12/2024 – MLS rules updates are effective.

8/23/2024 – PAR Webinar on Standard Forms Updates.

8/28/2024 – Embracing Change: “Turning Obstacles into Opportunities” Course

Practice Changes

Beginning August 12, 2024:

References to the listing broker’s offer of compensation to a buyer’s broker will be removed from your listings. This applies to all property types. No action is needed on your part.

Commission fields will no longer be available.

Fields being removed from listings (FlexMLS):

  • Buyer Brokerage Compensation and its correlating Type %/$
  • Sub Agency Compensation and its correlating Type %/$
  • Transaction Brokerage Compensation and its correlating Type %/$
  • Dual or Variable Rate Commission Y/N
  • Commission paid on Seller Assist Y/N
  • Selling Bonus Y/N
  • Bonus Amount
  • Data Fields (Lease Terms & Miscellaneous) under the detail label “Comm Paid Lease Renewal”
Beginning August 12, 2024:

Any offers of compensation CANNOT BE INCLUDED IN THE MLS OR ANY OTHER ANCILLARY SERVICE PROVIDED BY FlexMLS. THIS INCLUDES SHOWING TIME. Doing so risks violating the settlement for yourself, your brokerage, the MLS, and the Association. This is a part of the settlement agreement and will be aggressively monitored.

No reference to compensation can be entered into any part of a listing or third-party ancillary product. Offers of compensation or any reference to an offer of compensation cannot be entered in:

  • Any fill-in-the-blank data field of a listing
  • Directions
  • Public Remarks
  • Supplements
  • Private Remarks
  • Documents
  • Photos
  • Tours/Videos
  • Open Houses
  • 3rd Party programs such as Showing Time, etc.

Some examples of terms that will be monitored are compensation, commission, bonus, concession, and seller to pay if they are used as an offer to pay compensation. If you enter “Seller to pay closing costs” or “concession offered for flooring,” that is acceptable.

Sellers and listing brokers can still make offers of compensation to a buyer’s broker, but this must be done outside of the MLS.

If you are trying to figure out a way to use the MLS to communicate ANYTHING related to compensation (including commissions or concessions paid to the buyer’s broker), STOP!! This is NOT permitted.

Effective August 12, 2024, the settlement terms mandate that MLSs require all participants/subscribers providing brokerage services to a buyer to have a written agreement before touring a listing.

That agreement must describe the broker’s compensation and must include:

  • A specific and conspicuous disclosure of the amount or rate of compensation the Participant will receive or how this amount will be determined to the extent that the Participant will receive compensation from any source.
  • The amount of compensation in a manner that is objectively ascertainable and not open-ended.
  • A term that prohibits the Participant from receiving compensation for brokerage services from any source that exceeds the amount or rate agreed to in the agreement with the buyer.
  • A conspicuous statement that broker fees and commissions are not set by law and are fully negotiable.

MLS Participants who simply market their services or just talk to a buyer—like at an open house or by providing an unrepresented buyer access to a house they have listed will not be required to obtain a written agreement with a buyer at that time.

The obligation to enter into a written agreement with a buyer (Buyer Agency or other written agreement as described above) is triggered just prior to an MLS Participant taking a buyer to tour a home, regardless of what other acts the MLS Participant performs for the buyer. This includes either live or virtual tour to a buyer who is not physically present.

Click here for NAR’s Buyer’s Agreement 101

Buyer Agreements

What does a compliant Buyer/Broker Agreement contain?
  • The Disclosure
    Specify and conspicuously disclose the amount or rate of any compensation the MLS Participant will receive from any source, or how this amount will be determined;
  • The Amount
    The amount of compensation must be objectively ascertainable and may not be open-ended (e.g., “buyer broker compensation shall be whatever amount the seller is offering to the buyer”);
  • The Agreement
    Include a statement that MLS Participants may not receive compensation from any source that exceeds the amount or rate agreed to with the buyer;
  • The Disclaimer
    Disclose in conspicuous language that broker commissions are not set by law and are fully negotiable.
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Education & Training

This is an opportunity to articulate your value to consumers. Check out our upcoming Events and Classes for helpful tools to manage these conversations. As a reminder, PMAR is offering multiple ABR sessions at no cost to our members thanks to support from NAR. Please take advantage of these opportunities.
View all upcoming “Embracing the Change” events.

Resources

1. What changes, if any, do I need to make to my buyer agency contracts if they were signed prior to August 12, 2024?

Any written buyer agreement signed prior to August 12, 2024 need to adhere to the settlement and MLS rules. Be sure that all your Buyer Broker Agreements after the effective date of this policy contain:

  • A specific and conspicuous disclosure of the amount or rate of compensation that the Participant will receive or how this amount will be determined, to the extent that the Participant will receive compensation from any source.
  • The amount of compensation in an objectively ascertainable way, not open-ended.
  • A term that prohibits the Participant from receiving compensation for brokerage services from any source that exceeds the amount or rate agreed to in the agreement with the buyer.
  • A conspicuous statement that broker fees and commissions are not set by law and are fully negotiable. (This could be on a separate agreement but is required)

These contracts/forms do not need to be amended to accomplish the new disclosures. Participants/Subscribers can do a separate disclosure to the seller/buyer to satisfy the requirement.


2. What if my listing has not closed before August 12th? What should I do to ensure I get paid?

It is a good idea to get a Compensation Agreement, or a Revised Compensation Agreement signed. Once the fields have been removed from the MLS system, they will no longer be visible and cannot be referenced at that point. This is not a requirement, but you may want to have an updated signed compensation agreement for all your Active, Under Contract, or Pending listings.


3. Can a listing broker or seller request a copy of my Buyer Agency Agreement to verify my compensation before accepting an offer?

Nope! You can report it to us to verify compliance, however, you are not entitled to the information.


4. What happens if we get to closing and the buyer does not have the money to pay the buyer's agency commission?

Brokers should have a policy on how non-payment of buyer agency fees will be pursued. Arbitration is a common option when the buyer does not pay the contracted buyer agency fee.


5. Can the Cooperating Broker Compensation agreement (CBC) between brokers be added into the document section of the MLS? The place where documents go such as seller disclosure etc?

No. Offers of compensation are NOT to be accessible through the MLS including information provided in the documents tab.


6. Can we amend the compensation amount in a Buyer Agency Agreement if the seller is offering more compensation or a bonus on the sale of their property?

If you discussed this with your buyer and have written authorization from them, AND it is in line with your Broker’s policies AND is done in a way that is compliant with Pennsylvania law.


7. Some Companies have a touring agreement. Is this something PAR or PMAR is looking to add to our forms library? If so, when?

Not at this time. PMAR and the board are looking into this.


8. Do I need to get a full Buyer Agency Agreement signed prior to touring/showing a home or is a touring/showing agreement acceptable?

It is a great question for your broker and/or attorney. The settlement requires a written agreement with the buyer containing certain parameters. See Practice changes “Mandatory Buyer's Broker Agreements.” Please note PMAR does not dictate what type of relationship you have with your potential buyers, the terms of any agreement, the services to be provided, or any compensation to be charged.


9. Is there a difference between a written buyer agreement and a Buyer Agency Agreement?

Yes, there is a difference, but either or both can meet the settlement requirements. PMAR does not dictate what type of relationship you have with your potential buyers, the terms of any agreement, the services to be provided, or any compensation to be charged.


10. Is Seller Concessions the same as Commission? Can a seller concession be used to pay a buyer broker fee?

No, they are not the same. A concession is when a seller agrees to cover some of the closing costs for the buyer to make it more affordable. A commission is a fee paid to real estate agents for their professional services. However, a seller concession can be used to pay a buyer broker fee if agreed to in the Agreement of Sale.


11. Since Compensation is now removed from the MLS, how would you suggest we get the information to the buyers about what the seller is willing to pay for buyer compensation?

Offers of compensation will continue to be an option consumers can pursue off-MLS through negotiation and consultation with real estate professionals.


12. Why is PMAR adopting the MLS Policy changes August 12th instead of August 17th?

According to the NAR Proposed settlement agreement the MLS Policy changes must happen no later than August 17th. PMAR will implement the changes on the Monday prior to ensure our members have time to adjust before a busy summer Saturday.

Need help? Still have questions? Drop your questions HERE.