Changes to the MLS and Real Estate Commissions

In the dynamic world of real estate, staying informed about regulatory changes is crucial for agents, brokers, and homeowners alike.  With the recent NAR lawsuit there are significant changes coming to how and who pays real estate commissions.

The National Association of Realtors had been in existence since May 12th, 1908 and sellers have traditionally paid the brokerage fees / real estate commissions for the sale of their home and the buyer’s real estate broker.

This August, significant updates to the Multiple Listing Service (MLS) and the way real estate commissions are handled will come into effect, reshaping how transactions are conducted moving forward.

Here’s what you need to know about these changes as a home buyer or seller:

Key Dates and Changes:

August 15: Compensation Fields Removed

Starting August 15, the MLS will automatically remove all fields related to compensation / real estate commissions from all listings. 

August 17: Compensation/ commissions in MLS Prohibited

Effective August 17, any mention of compensation / real estate commissions in MLS listings will be a violation of  MLS Rules and Regulations. This prohibition extends to all fields, including public and private remarks. 

The goal is to ensure that the focus remains on the property details rather than the compensation arrangements.

August 17: Buyer Written Agreements Required

On the same day, a new requirement will take effect mandating that agents working with buyers enter into a written agreement with the buyer before touring a home, whether in-person or virtually. 

This written agreement is crucial for defining the terms of the agent-buyer relationship and ensuring clarity on compensation and representation.

Things to know as a home buyer or seller:

• If you are a buyer and your agent is using an MLS, you will need to sign a written agreement with your agent before touring a home so you understand exactly what services will be provided, and for how much.
• Written agreements are required for both in-person and live virtual home tours.
• You do not need a written agreement if you are just speaking to an agent at an open house or asking them about their services.
• Agent compensation for home buyers and sellers continues to be fully negotiable.
• When finding an agent to work with, ask questions about their services, compensation / real estate commissions and these written agreements.

Moving forward, brokers will need to ensure they have documented agreements to substantiate any compensation arrangements made off the MLS.

These changes aim to protect all parties and ensure a clear understanding of the terms of representation, ultimately leading to more professional and trustworthy interactions.  

In the meantime, you can search the live MLS for your new home here on my website.  And remember, whether you are buying or selling a home, please allow me to represent you and your family in all your real estate needs.