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Compliance expert Summer Goralik is here to help clarify the confusion surrounding the NAR commission lawsuit settlement and the resulting changes in business practices. Let’s work together to move forward as an industry.
This week’s question
There is a lot of uncertainty surrounding the NAR’s direction compared to state-level associations like C.A.R. Can NAR and/or C.A.R. leadership communicate directly with the DOJ to resolve the confusion instead of leaving the entire industry in doubt? Is it acceptable to market a seller offering a concession? The messaging seems conflicting.
Compliance expert answer
As we approach the effective date of practice changes on Aug. 17, there is still a lack of clarity on how to move forward. Despite understanding the concept of the changes, the practical implementation remains uncertain. Practitioners must navigate compliance with the NAR settlement, DOJ requirements, and consumer expectations.
The guidance from NAR, state associations, and the DOJ on cooperative compensation and concessions has been inconsistent, leading to confusion among industry professionals. Let’s delve into the details to address these issues.
Cooperative compensation
NAR’s FAQs state that brokers can still engage in cooperative compensation, but the MLS will no longer facilitate such offers. Some associations have removed broker-to-broker compensation provisions from agreements, causing uncertainty among practitioners.
The conflicting messages from different entities create challenges for practitioners trying to comply with the settlement while meeting consumer needs. This highlights the need for clear and consistent guidance.
What should you do?
Exercise caution, conduct thorough research, and monitor developments in your local area. Consult legal experts and ensure you understand the changes in forms and MLS practices. Train your agents accordingly to navigate these changes.
Concessions
The NAR settlement allows for the advertisement of seller concessions on the MLS, with discretion left to individual MLSs. Some MLSs may include concession fields, while others may not.
Stay informed about MLS policies regarding concessions and ensure you are compliant with the new regulations. Seek guidance from your broker and industry experts to navigate these changes effectively.
The concession field in your MLS will now only have a simple “yes/no” question regarding whether the seller is open to concessions. It’s important to understand how your local MLS handles concessions and familiarize yourself with the rules. Your responsible broker may have a policy on entering concession information into the MLS, so it’s best to follow their guidance. Remember to prioritize your seller’s interests and discuss options with them before proceeding.
Stay proactive and informed during this period of change. Don’t just use concession fields because they are available; address any discrepancies and ensure compliance with the NAR settlement. Keep an eye out for industry form modifications, new laws, and potential litigation post-August 17. Learning from others’ experiences can offer valuable insights and help you navigate these changes effectively.
Disclaimer: The opinions shared in this discussion are based on experience and knowledge of real estate laws, but they should not be considered legal advice. Consult with your brokerage or legal counsel for clarification. Summer Goralik is a real estate compliance consultant with expertise in California real estate laws. Connect with her on LinkedIn.