Overview
Since August 17, 2024, the NAR settlement rules have prohibited offers of buyer-agent compensation from being communicated through the MLS. Sellers can still offer compensation to a buyer's agent, but it has to happen off-MLS, through direct communication, marketing materials, or the purchase agreement itself. Buyers working with a REALTOR must sign a written buyer-broker agreement before touring a home, spelling out exactly how their agent gets paid. Here's what buyers and sellers need to know about how these rules actually work in practice.
Understanding the Key Changes
Offers of Compensation Moved Off-MLS
- Offers of compensation can no longer be communicated through MLS platforms.
- Compensation can still be negotiated off-MLS through direct consultations and negotiations between real estate professionals and their clients.
New Communication Channels
- Once a seller approves an offer of compensation, it can be shared through marketing tools like flyers, signs, emails, and other channels outside the MLS.
- Brokers can display compensation offers for their own listings on their own websites, but they can't display offers for other brokers' listings if that display relies on MLS data or data feeds.
Seller Concessions
- Sellers can still offer general buyer concessions, and agents can communicate these on the MLS following local MLS rules, as long as the concession isn't tied to using or paying a buyer broker specifically.
Buyer Negotiations
- Buyers can direct their buyer broker to include a term in the purchase offer requesting that the seller pay a specific amount of compensation to the buyer broker.
- REALTORS can't attempt to alter the terms of a listing agreement, since that's a contractual matter between the listing broker and the seller. Listing agents must serve their seller's best interests and can't delay or withhold delivery of a buyer's offer in order to negotiate compensation.
Written Buyer-Broker Agreements
- Buyers and buyer brokers must sign a written agreement before the buyer tours a home with that broker.
- Any compensation arrangement for the buyer broker's services has to be documented in writing, spelling out the amount or structure and confirming it's negotiable.
What This Means for Sellers
- Communicate offers appropriately: share any offer of compensation through allowable off-MLS channels such as flyers, signs, or direct emails to agents, not through the MLS compensation field, which no longer exists.
- Use buyer concessions strategically: general buyer concessions can still run through the MLS under local rules, as long as they aren't structured as compensation tied to a buyer broker.
What This Means for Buyers
- Sign a written agreement before touring: discuss and formalize compensation terms with your buyer broker before you start viewing properties, not after you find one you like.
- Understand your broker's obligations: your buyer broker must act in your best interest and can't independently negotiate their own compensation directly with the seller outside the terms you've agreed to.
