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Following up on NAR’s March 15 announcement of a proposed settlement to end the Sitzer/Burnett class-action lawsuit, Washington REALTORS® has released a video update breaking down the three aspects of the proposed settlement and what their impacts are likely to be for real estate practitioners in Washington State.

At a fundamental level, the proposed rules will place further importance on a buyer brokers’ ability to demonstrate the value that they’re providing for their client. New State law, requiring buyer brokers to have an agency agreement in place prior to providing real estate services, further drives home the point that communicating value to buyer clients is more important than ever.

Thanks to the proactive advocacy work done by Washington REALTORS®, two components of the proposed settlement agreement are already law in Washington State. Those components are:

  • Written agreements for MLS participants acting for buyers: While NAR has been advocating for the use of written agreements for years, in this settlement we have agreed to require MLS participants working with buyers to enter into written representation agreements with their buyers. This change took effect in Washington State on January 1, 2024.
  • Buyer and seller broker compensation must be negotiated in a decoupled agreement. This means that the seller will agree to negotiate compensation with the listing firm in an established amount, and separate of that agreement the seller may, if they choose, make offers of concession.

An additional change included in the proposed settlement agreement, which would also be new practice in Washington State, is a prohibition of publishing any seller offers of buyer broker compensation in a listing on a REALTOR®-owned MLS. The impact of this change is still to-be-determined, however, as the NWMLS, which controls roughly ¾ of the territory in the state, is not REALTOR® owned. While the proposed settlement agreement does offer a provision for NWMLS to enter the settlement and to enjoy the protections of the agreement negotiated by NAR, it is unknown if NWMLS will elect to join as a party to the agreement.

While there are many steps along the way for buyer brokers to provide value for their clients, the change related to seller concessions is a key opportunity in a transaction for a buyer broker to display value in tangible dollars and cents. Sellers may offer concessions in their MLS listing which could include covering parts or all of a buyer broker’s commission, and any other aspects of the transaction such as closing costs or material defects to the home which require repair at the expense of the buyer.

Between a negotiated buyer agency agreement, signed by the buyer broker and client prior to shopping for a new home, and the allowance for the seller to still list concessions to the buyer in an MLS listing, there will likely be an opportunity for negotiation on the buyer broker’s final commission amount as a part of completing a real estate transaction. Take advantage of this opportunity!

To hone your negotiation skills, TPCAR recommends that its members take advantage of a current NAR offer for a free Accredited Buyer’s Representative (ABR®) Designation – a $295 value – to learn how to display your value to a client. Sessions are scheduled over the course of 2024 to enable members to take the course online at their own pace.

While the terms of the agreed upon settlement payment include changes to industry practices, and payment of a $418 million fee over approximately four years, NAR denies any wrongdoings and continues to believe that current policies benefit buyers and sellers and promote access to property ownership, particularly for lower- and middle-income buyers who can have a difficult-enough time saving for a down payment. With this settlement, NAR is confident it and its members can still achieve all those goals.

TPCAR will continue to keep its membership apprised of changes as several steps remain prior to the settlement agreement receiving final approval and its terms taking effect.

Additional NAR Settlement Resources

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