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New rules stemming from the National Association of Realtors’ commission lawsuit settlement went into effect Saturday following years of litigation, potentially upending the industry, including how agents get paid.
Inman has covered the topic extensively and last week published a rundown of the rules that now govern NAR members and affiliated multiple listing services. This week, we’re calling agents, brokers, MLS executives, portals and other insiders as the rules rollout. Follow along as we update this story in real time.
TUESDAY, AUGUST 20
12:03 p.m. ET: COMMISSION QUESTIONS: In the wake of NAR’s new settlement rules, many buyer’s agents are suddenly confronting a new question: What commission should they ask for in their buyers’ agency agreements?
The question popped up Tuesday in the Real Estate Mastermind Facebook group and quickly garnered nearly 200 responses. Those responses ran the gamut.
“I’m asking the buyer to pay my rate but advising them the seller may be offering something towards that,” one agent responded. “If that’s the case they only have to pay what’s left.”
“Sit down with your buyer and a trusted [loan officer]” another suggested. “Have the [loan officer] complete the various costs including your compensation and without any compensation (seller contributes). Once the buyer sees how much they have to come up with, they can make a decision. Then you make yours.”
Some commenters also said that their brokers are making recommendations. Meanwhile, a number of others suggested that even having a commission discussion among agents was ill-advised.
“This thread is illegal,” one commenter argued, echoing a number of other remarks. “It’s price fixing and the whole reason the [U.S. Department of Justice] got involved. Commission/Concessions should only be discussed between the agent and his/her client, never among agents.”
The debate highlights the fact that many practical issues stemming from the settlement are yet to be worked out — and that additional litigation is top of mind for many real estate professionals. —Jim Dalrymple II
10:55 a.m. ET: TAKING STOCK: Apparently, investors are bullish on change.
Share prices for publicly traded real estate companies surged Monday and Tuesday, the first business days after sweeping changes took effect. The stocks have risen sharply over the past five days, with Redfin leading the way.
- Redfin: $9.51 (+24.75%)
- Offerpad: $3.60 (+22.03%)
- Compass: $4.88 (+11.53%)
- Opendoor: $2.02 (+10.68%)
- RE/MAX: $10.86 (+9.37%)
- Zillow: $55.83 (+4.08%)
- CoStar: $74.70 (+2.19%) — Taylor Anderson
7:55 a.m. ET: BIG DAY: Saturday’s deadline took place against a backdrop of significant change for the real estate industry, including cooling mortgage rates and NAR’s decision to make interim CEO Nykia Wright the organization’s permanent CEO. Michael Ketchmark — the attorney who represented consumers in one of the high-profile cases NAR settled — has indicated he’s watching closely and is prepared to take action against rule-breakers.
In that context, and with mainstream news coverage reaching a fever pitch, the real estate industry on Monday faced existential questions: Are the NAR rules about to change everything? Will the status quo give way to chaos? Is this the beginning of the end of real estate as we know it? None of the above, it turns out.
Inman’s editorial staff spent Monday — the first business day after the rules kicked in — reaching out to brokers, MLS leaders and analysts seeking answers. The people who spoke to us shared experiences resembling a busy weekend. Others described confusion in the marketplace. Several suggested it’s simply too early to gauge the new rules’ impact. READ THE STORY.
7:45 a.m. ET: Hidden commission offers in images of mowed lawns, yard signs and key chains have cropped up to an alarming degree ahead of the deadline for rule changes, according to real estate leaders and a new analysis by Inman published this morning.
Executives from the nation’s largest brokerages and MLSs issued warnings about the workaround tactics leading up to changes enacted by the National Association of Realtors settlement agreement, including an aerial image that appeared in a faux listing photo with “3%” mowed into the backyard.
But there a catch, according to Inman reporter Taylor Anderson: the image is an apparent joke, created by a Louisiana eXp agent Tyler Polk and shared across Facebook groups dedicated to real estate. READ THE STORY.
MONDAY, AUGUST 19
5:25 p.m. ET: Texas-based franchisor Keller Williams has published a resource for agents struggling to navigate commission changes, executives announced.
The comprehensive “Buyer and Seller Agent Tools to Thrive,” resource includes a settlement FAQ for agents and consumers, compliance guidance, tactical advice on handling big questions and objections from buyers and sellers, and 20 interviews with Keller Williams’ top agents and team leaders on how to pivot.
The page also includes replays of relevant Mega Agent Camp conference sessions, links to KW podcasts and digital content, and a schedule for several upcoming company-wide town hall meetings, dubbed KW Open Houses.
In a statement to Inman Monday, KW Head of Industry and Learning Jason Abrams said the page was “built for all agents and brokers” regardless of affiliation. “We aimed to capture and share the collective brilliance and best practices from top agents and coaches in the industry to empower everyone with real-time strategies, tools, and tips so they make the best decisions locally that comply with the NAR settlement,” he said. —Marian McPherson
4:25 p.m. ET: Jessica LaMar is no stranger to change — the former Lululemon corporate manager began her career in the early days of the pandemic and quickly became one of the most sought-after agents in Sacramento.
However, she’s found it difficult to adjust to settlement changes as sellers and listing agents employ a variety of approaches to compensating buyer brokers.
LaMar said her MLS set a deadline for Aug. 12, five days before a national target for the NAR settlement. In the days since then, some brokerages have allowed listing agents to disclose a specific percentage for a buyer broker commission — within compliance — while others have told their agents to say it’s negotiable.
In the latter case, she said listing agents are asking homebuyers to request a seller concession for buyer-broker compensation in their offer. Of course, sellers can also decline to offer a concession, leaving homebuyers to pick up the tab.
LaMar said she’s gotten the most fierce pushback from homebuyers she’s been working with for months, who don’t understand why everything is changing.
“Even if I explain it thoroughly and how these changes can work in their favor, they still aren’t comfortable with it,” she said. “I’m telling homebuyers they can go to open houses if they’re not ready to sign anything, but it’s going to be tricky if they find a property that doesn’t have an open house.” —Marian McPherson
3:30 p.m. ET: MEMES AND WORKAROUNDS: As the real estate industry grapples with NAR’s new rules, MLS and brokerage leaders are warning agents against trying creative workarounds. “Do not be cute,” The Real Brokerage President Sharran Srivatsaa said during a recent webinar earlier this month.
The comment came as many industry members shared a photo online of a house with “3%” mowed into its backyard lawn — an apparent sign that the homeowner was willing to pay a buyer’s agent commission. The image was actually created by an agent as a joke, but it was also just one of numerous such memes circulating widely on social media as the new rules kicked in.
Inman reporter Taylor Anderson dove into such images, and his report on where they’re coming from — as well as what industry leaders think — lands Tuesday morning in Inman’s Commission Chronicles newsletter. —Jim Dalrymple II
2:45 p.m. ET: JUST DIAL TONES: Amid the efforts to get agents up to speed, TRIBUS CEO Eric Stegemann said the industry, for the most part, has failed to properly educate homebuyers and homesellers about commission changes.
Stegemann said he’s seen local real estate boards, Realtor associations and MLSs make an effort to educate consumers in their markets. However, there needs to be a concentrated, organized effort to reach them on a national scale, he said.
“Over the weekend, I don’t know how many stories I’ve heard from folks about having to explain it, and the consumer hangs up on them and calls somebody else,” he said. “Nobody has educated the consumer on the fact that this is real.”
“I’ve seen Kevin [Sears] out there, and he’s doing what I’m sure is his best to get down to as many places as possible, but it can’t be a one-man thing,” he added.” It’s got to be coordinated and have a lot of push behind it and make sure that consumers know that their Realtor is not lying to them, that they really do need to sign an agreement to go [tour] a house now.”
He said it’s not too late for MLSs, associations and brokerages to team up and take the lead on consumer education. “I haven’t seen that national push of you know $10, $20, $30 million dollars being spent to educate consumers on the concept that a buyer’s representation agreement is now mandatory,” he said.
“That’s what we need,” he added. —Marian McPherson
2:20 p.m. ET: From fear and loathing to smooth sailing, last week’s Pulse survey revealed a range of responses to the Aug. 17 deadline.
One trend? Agents frustrated with other agents.
From those who believe the industry is overstaffed to those who are frustrated by their colleagues’ negativity, agents polled were looking beyond buyers and sellers to the industry itself. “We need to shed a million agents from the rosters,” one said, while another said, “My colleagues need to buck up, move forward and be the professionals we know we are!” READ THE STORY. —Christy Murdock
12:45 p.m. ET: OPEN HOUSE, OPEN QUESTION: Among the real estate professionals watching how the settlement changes unfolded this weekend was Collabra Technology CEO Russ Cofano, who told Inman that colleagues on the ground relayed their activities at home showings and open houses on Saturday.
Buyers appear to be leery about signing short-term agreements and may favor open houses over individual tours until they’re at ease with the rules, he said.
“It’ll be very interesting to see whether open house traffic increases, which I expect it will once buyers understand they don’t have the same friction with agreements by going directly to open houses,” he told Inman Monday by phone.
“One stat we’re going to be looking at is the number of open houses relative to active listings. That’ll let us know whether buyers truly do use them as a less frictious way of accessing the property versus touring with a buyer’s agent.” —Marian McPherson
11:28 a.m. ET: WHAT ARE YOU SEEING? As the lunch bell approaches, Inman wants to know what friction, distractions, slowdowns or complications you’ve encountered today. Let us know with your vote and we’ll report back later today.
10:33 a.m. ET: NO LONGER INTERIM: Nykia Wright, who has served as the interim CEO of the National Association of Realtors since November, will stay on as full-time head of the organization, NAR President Kevin Sears confirmed Monday.
Wright joined the 1.5 million-member organization after leading the Chicago Sun-Times through its tumult and transition into a nonprofit newsroom. Wright was asked last week whether she would stay on as CEO but deflected.
“I bloom where I’ve been planted,” she said, “and I let the universe take care of the rest of the details.” —Taylor Anderson
10:05 a.m. ET: NAR SUIT FILED, DROPPED: A South Carolina real estate brokerage filed a class action lawsuit against the National Association of Realtors and seven state Realtor organizations Friday, alleging the group violated federal antitrust laws by compelling membership in order to effectively conduct business. It withdrew the lawsuit the same day.
In its complaint, the Cassina Group initially targeted a “mandatory triple membership” of local, state and national Realtor associations it says is required for real estate professionals to access lockboxes and transact properties. It would have been the second lawsuit targeting NAR and the fees and other rules in place that compel members to pay fees to conduct business.
The suit was filed Aug. 16, a day before the NAR settlement deadline, in the U.S. District Court of Northern Illinois, before being withdrawn. — Taylor Anderson
6:30 a.m. ET: READY, SET, GO: With all the commotion over the changes this weekend, Inman wants to know how you’re coping. Our reporters are working the phones this morning, but give us your first impressions of the week, below, and we’ll update the blog with responses this afternoon. —Jotham Sederstrom
5:45 a.m. ET: WATCHING THE DETECTIVES: Whatever you do, whatever you think you can do under the new rules, the plaintiffs’ attorneys will be watching.
That’s according to Michael Ketchmark of Ketchmark & McCreight, lead plaintiffs’ counsel for Sitzer | Burnett, the only suit among two dozen filed nationwide that has gone to trial. That suit resulted in a massive jury verdict in favor of the plaintiffs and against NAR and franchisors Keller Williams, Anywhere, RE/MAX and HomeServices of America.
Inman Deputy Editor Andrea Brambila spoke to Ketchmark ahead of the Aug. 17 deadline and his message was clear: Attorneys will be monitoring the actions of agents, brokers and MLSs this week and they have a variety of levers to pull if they witness anyone violating the rules. READ THE INTERVIEW.
5 a.m. ET: After months of anticipation, it’s Monday, and we’re finally living in our “New Normal,” where buyer’s agent compensation is no longer offered via Realtor-affiliated multiple listing services, and all buyers need to sign some type of agreement before a buyer’s agent takes them to tour a property.
We’ve known for a while that the rule changes of the proposed National Association of Realtors settlement would go into effect on Aug. 17, but with all of the questions, concerns and confusion surrounding the implementation of the new rules, agents and brokers are still looking for clarity.
Inman Editor Christy Murdock has compiled many of the questions you have, along with others we’ve encountered nationwide. The goal is to create a comprehensive resource to help our readers feel more confident and secure as you acclimate to the major changes. Check back as we fill in the resource with more of your unanswered questions. READ THE STORY.
SATURDAY, AUGUST 17
7:30 a.m. ET: DAWN OF A NEW DAY: Beginning today — Saturday, Aug. 17 — the real estate industry is poised for an exciting new chapter as the commission lawsuit settlement officially takes effect. On the historic day, Brad Inman offers his thoughts on how the industry can exceed its own expectations under the changes.
The best agents will thrive, the profession will be elevated, rot will be removed and brands built on trust and integrity will rise to the top, Inman writes.
“Fewer corners will be cut and the industry’s tainted reputation will be repaired,” Inman adds. “Substance will trump flash.” READ THE STORY.
6:02 a.m. ET: Five months after the National Association of Realtors agreed to a landmark antitrust settlement, the rules resulting from it go into effect today.
The rules will determine both how agents will get paid, and how consumers search for homes. In the former case, homesellers and their brokers will no longer be able to offer commissions to buyers’ brokers within NAR-affiliated multiple listing services.
In the latter, buyers will need to ink an agreement with their broker before touring a home. Other rules require brokers to disclose that commissions are negotiable and bar MLSs from helping seller agents make offers of compensation via non-MLS mechanisms. READ THE STORY.
FRIDAY, AUGUST 16
4:07 p.m. ET: A BRAVE NEW WORLD: The weekend marks the deadline when NAR’s new commission settlement rules go into effect. The deadline has prompted a race to the finish line as multiple listing services update forms and issue stern warnings, while NAR scrambles to educate the public. Meanwhile, industry leaders are spending significant energy assuaging concerns while agents debate the impacts in online forums.
To understand what’s happening, Inman reached out to key players and agents across the U.S. Two takeaways from these conversations emerged: First, multiple listing services — which are tasked with actually implementing the new rules — have already been rolling out changes. And the apocalypse has not arrived.
But second, some in the trenches say confusion still abounds. As a result, real estate practitioners need to exercise caution. READ THE STORY. —Andrea V. Brambila, Taylor Anderson, Lillian Dickerson and Jim Dalrymple II