Attention Homebuyers: Everything Has Changed, Yet Nothing Has Changed

As of today, August 17, there are major changes to the national real estate market’s practices regarding buyer-broker compensation due to the settlement between the National Association of Realtors and a group of home sellers. The lawsuit was against  the NAR and some brokerages in a case known as Sitzer-Burnett. It was a class action lawsuit filed in Missouri federal court in 2019, with the proposed settlement announced in March 2024.

According to national headlines, everything is changing this summer as new NAR rules take effect. However, the Seattle-area Northwest Multiple Listing Service has been making significant changes since 2019, so, in our market – unlike most of the US – there isn’t any groundbreaking change taking place today.

I am proud to say we in the NWMLS have been leading the national industry with changes that are just now starting to sweep across the country. As I have maintained in my professional practices since the filing of the case against NAR in 2019 – and in my new information campaign in 2024 – there are two main themes here, and both are very good for you as a buyer (or seller): 

1. You are now legally entitled to full transparency regarding real estate brokerage services and broker compensation. 
2. You are empowered to confidently hire the expert most qualified to meet your needs. 

In short, the stage is set for real estate professionals to win your business based on the actual value of services provided – our expertise. 

When I met with a client last week and answered her questions about broker compensation, I found myself saying, “Everything has changed, yet nothing has changed.” Here are the bullet points from NAR about the national rule changes required as of August 17, along with a few subpoints: some context, how there is change, and how there is not any change for my practice here in the NWMLS as of this summer. 

New NAR Rule: “Eliminate and prohibit any requirement of offers of compensation in the MLS between listing brokers or sellers to buyer brokers or other buyer representatives.”

• Local Context: This was the foundation of the 2019 case filing because there was a requirement in NAR-owned MLSs that sellers had to offer compensation in order to list their home for sale. The NWMLS is not owned by NAR, but rather owned by members like me. 
• Change: While the NWMLS used to have a $500 minimum offer of compensation, that requirement was abandoned in 2019. 
• No Change: For about five years now, sellers who list homes for sale in the NWMLS have not been required to offer Buyer Broker Compensation (BBC) in order to list their home for sale.  

New NAR Rule: “Retain and define “cooperation” for MLS participation.” 

• Local Context: Cooperation refers to how, in NAR-owned MLSs, the total amount of broker compensation would be paid by escrow to the seller’s brokerage and that brokerage would then pay the buyer’s brokerage. This practice meant buyers and sellers were not necessarily aware of how much either broker was being compensated. 
• Change: NWMLS was the first in the country to publish the amount of BBC offered by a seller on the public portals (Zillow, Redfin, etc.) back in 2019 in an effort to be transparent about broker compensation. 
• No Change: In Washington, compensation paid to a buyer’s brokerage has always been paid directly from escrow and has never come directly from the seller’s brokerage. 

New NAR Rules: “a) Eliminate and prohibit MLS participants, subscribers and sellers from making any offers of compensation in the MLS to buyer brokers or other buyer representatives. b) Require the MLS to eliminate all broker compensation fields and compensation information in the MLS. c) 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 use must result with the MLS terminating the participant’s access to any MLS data and data feeds.”

• Local Context: The NWMLS has opted out of participating in these new rules because it believes that these points are counterproductive to the effort towards consumer transparency. Read their statement here. 
• Change: The NWMLS will stand by the changes made in 2019 to publish BBC to the public and will not revert its practice. 
• No Change: The NWMLS has stated these changes are “a step in the wrong direction and [are] detrimental to consumers and brokers alike.” As such, there is nothing new for the NWMLS this summer, despite what national news outlets are saying about the industry’s required changes. 

New NAR Rule: “Reinforce that MLS participants and subscribers must not, and MLSs must not, enable the ability to filter out or restrict MLS listings that are communicated to customers or clients based on the existence or level of compensation offered to the cooperating broker or the name of a brokerage or agent.”

• Local Context: Prior to BBC being published to the public, homebuyers did not know if their “trusted” broker was filtering homes out of the search process because the listing offered less compensation than they wanted to earn. Sadly, I doubt you are shocked to hear that some real estate brokers were acting in their own best interest of compensation before their client’s interest in finding the right home. 
• Change: This was the primary reason BBC was published by NWMLS back in 2019; this was the first effort towards transparency of buyers knowing what compensation, if any, the seller was offering their broker to facilitate their purchase process. 
• No Change: Again, the NWMLS is not going to revert on the change it made in 2019 to publish this information to the public. 

New NAR Rule: “Require compensation disclosures to sellers, as well as prospective sellers and buyers.”

• Local Context: WA Agency Law has long required us brokers provide disclosures to both buyer and sellers. Starting back in 2022 the NWMLS started to incorporate the amount of buyer broker compensation, and the party responsible for funding it, into the actual purchase and sale forms. 
• Change: For the last few years the NWMLS has been updating its state-wide forms (purchase and sale agreement and related addenda) to ensure the amount of BBC, and which party is responsible for funding it, is disclosed front and center as a term in the contract agreed upon between buyers and sellers. 
• No Change: While there have been revisions over time to the contract forms, there is really nothing new to our practice as of this summer.  

New NAR Rule: “Require MLS participants working with a buyer to enter into a written agreement with the buyer prior to touring a property.”

• Local Context: While the NWMLS has always had Buyer Brokerage Service Agreements (BBSA) available to its members, using it was never a legal requirement and it’s estimated that less than 10% of brokers engaged in the practice. 
• Change: As of January 1, 2024 all brokers in WA are now legally obligated to enter into a services agreement with buyer-clients “as soon as is reasonably practicable.” The agreement must disclose the term of the agreement, the amount of compensation the buyer broker will earn in a transaction and a few other consumer-friendly details. 
• No Change: Given all brokers in WA have been required to have an agreement in place with buyer clients since the start of this year (a conversation I am LOVING having with my clients, by the way), there is nothing new for me to do today.
  

The bottom line:  The biggest change in ‘24, and as of August 17, is that you are now aware of the topic of buyer broker compensation and are empowered to  ask questions about it, and choose who you hire based on the value and expertise they bring to you. 

I can assure you, every single new client conversation I have includes time spent discussing my value and my compensation. What I can also assure you is that I’ve been preparing for this day since 2019 when our NWMLS announced major changes were coming and it was time for us, as brokers, to start articulating our value to win your business based on our skills. 

I’m ready for the changes taking effect in my industry because, for me and the NWMLS, there is nothing different as of today. And believe me, I’d love to share my revised Buyers Guide and all new Buyer Presentation to show you the value I would bring to the table as your buyer broker.  I’d be delighted to have the opportunity to answer your questions about what’s new in my industry and what’s not.