The massive trade organization promised in March to make various policy changes as part of a landmark settlement. The rules will now roll out slightly later than expected.
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The National Association of Realtors on Friday outlined the various policy changes that will stem from its landmark commission lawsuit settlement, and revealed that those changes will go into effect in August.
NAR broke down all the policy changes in a 57-page document posted to its website. Significantly, the document begins with an executive summary revealing that the changes “were approved by the NAR Leadership Team and will be effective on Aug. 17.”
The August date may surprise some observers; after NAR agreed in March to settle various homeseller-led commission lawsuits, the resulting policy changes the organization promised to make were expected to officially roll out in July.
The new date pushes the deadline back. It’s also the first date that a class notice can go out following preliminary approval of the settlement, which happened on April 24. A hearing to grant the settlement final approval is currently scheduled for November.
NAR’s new document also outlines the specific policy changes that will go into effect. Among other things, those changes prohibit listing agents from making offers of compensation in the MLS to buyers’ agents. The document further notes that MLSs also will have to eliminate the fields in their technology platforms where such offers were made, and states that MLSs also can’t create other mechanisms for their members to make such offers.
The document additionally explains that the new rules “prohibit the use of MLS data or data feeds to directly or indirectly establish or maintain a platform of offers of compensation from multiple brokers or other buyer representatives.” Such a rule presumably means a consumer-facing portal, for example, cannot step in and fill the role MLSs once had by displaying offers of buyer agent compensation from sellers or their brokers. Doing so will “result with the MLS terminating the participant’s access to any MLS data and data feeds,” the document adds.
The document also defines the word “cooperation” as it pertains to MLS participation, notes that compensation disclosures will be required between consumers and their agents, and reiterates that buyers will need to have signed agreements with their agents before touring homes.
Though various policy changes stemming from the settlement were already announced and clarified, the new document shows specifically how and where NAR’s governing language has been updated to reflect the changes. Because the document is lengthy, Inman will continue to analyze it and report on additional details in the coming days.
In the meantime, some uncertainty remains. Though NAR has expressed confidence in its settlement — which will also see it pay $418 million — the U.S. Department of Justice has also indicated it wants to see even bigger changes. The DOJ consequently serves right now as something of a wildcard that could, ultimately, mean different or bigger policy changes lie ahead as well.