Here is What You Need to Know About Buyer Agent Compensation
November 1, 2023 Industry News
Starting today, a listing broker may now offer $0 in compensation in listings entered into CCIMLS. Previously, there was a constraint in the system requiring a dollar figure or percentage greater than zero based on our interpretation of our MLS Rules and Regulations.
The CCIMLS Board of Directors has been looking at and discussing this issue for more than a year, and is actively looking into other potential changes they can make to our rules and regulations regarding cooperative compensation in the ongoing effort to keep CCIMLS relevant, dynamic, and compliant with future rules.
The CCIMLS Board of Directors is most interested in looking at what the United States Department of Justice has to say in the Nosalek vs. MLS PIN settlement. It is expected the Justice Department will file their challenges to the MLS PIN settlement in January and that by mid-March, the MLS PIN settlement will be finalized.
We encourage you to watch a portion of the Monday, October 30th Zoomed In On Real Estate and hope you avail yourself of compensation training and buyer agency that we held over the last few years as we focused our efforts to educate members on the ongoing changes to buyer agent compensation. Additionally, we plan to continue to ramp up our offerings of training on this topic in the coming months.
Key Points to Remember
- You have always been allowed to reject the offer of compensation offered in the MLS and request the listing broker or seller pay more with permission of your buyer
- Under the Code of Ethics, all agreements should be in writing, so we continue to advise you to have a buyer agency agreement that spells out what, and how, you intend to be paid as a buyer’s agent.
- If the offer of compensation is $0, the listing agent is still duty bound to cooperate with other REALTORS® who seek to bring buyers to the property. Cooperation and compensation are distinctly separate.
- All of our other MLS rules remain in effect, including the Clear Cooperation Policy, which requires all listings that are publicly marketed to be entered into the MLS.
NAR Loses Sizter Lawsuit. What Happens Now?
You may have seen in yesterday’s news that the class action plaintiffs won the Sitzer vs. NAR lawsuit that alleged an antit-trust conspiracy to inflate costs for sellers by having a rule in MLSs that mandated an offer of compensation.
After an 11-day trial in the case of Sitzer/Burnett v. NAR et al, the eight-person jury in a Kansas City, Mo., federal courtroom came back Tuesday and found NAR and other corporate defendants liable in the case.
NAR had presented in court that its rules prioritize consumers, support market-driven pricing and promote business competition. This matter is not close to being final as NAR will appeal the jury’s verdict. It will likely be several years before this case is finally resolved.
The jurors found that the conspiracy had caused the plaintiffs to pay more for real estate brokerage services when selling their homes than they would have without the conspiracy.
The verdict comes with $1.6 billion in damages awarded to homesellers over the past 10 years in Missouri. The jury awarded $1,785,310,872 in damages, which, under the law, will be automatically trebled to $5.356 billion.
We know you have questions. Quite frankly, we do not have all the answers for you, but we are providing what we do know.
Here are some frequently asked questions from NAR regarding the trial verdict:
What will be the basis for NAR's appeal?
NAR can't speak to the specifics of that until they file their appeal, but states that they have a very strong legal basis for appeal.
What does the future of buyer representation look like as a result of the verdict?
This verdict does not require a change in our rules, but if class action attorneys had it their way, buyer representation would be very much at risk because many first-time home buyers, among others, couldn't afford to pay for representation out of pocket. It's important that members take every opportunity to express how they are experts who guide consumers through the financial, legal and community complexities of buying or selling a home.
Does NAR have the funds to pay the proposed damages or post a bond to file an appeal?
NAR is going to appeal and has the funds to post bond, which allows them to proceed with their appeals and defer potential payment of damages. While appeals take years, NAR is confident that they will ultimately prevail. They are also financially prepared for any final judgment.
How does this verdict affect other ongoing litigations, including the other seller lawsuit?
It doesn't. Cases are tried separately, and NAR remains confident they will ultimately prevail because they have a strong case they will present on appeal, and because their rules are pro-consumer and pro-business competitive.
Is there any scenario where NAR would consider settling?
NAR has always been open to a resolution that maintains a way for buyers and sellers to continue to benefit from the cooperation of real estate professionals and eliminate members' risk of liability for the claims alleged. That being said, NAR remains confident they will prevail on their appeal.
Does NAR expect the plaintiffs to seek an injunction that would require NAR to stop making the rule mandatory or eliminate the rule altogether?
We cannot predict what plaintiffs will do. NAR would contest any such effort because this rule has always been in place to protect and serve the best interests of consumers, support market-driven pricing and advance business competition.