As of August 17, 2024, the National Association of REALTORS® (NAR) has officially implemented major rule changes. These changes, crafted as part of a settlement package by NAR, which continues to face numerous class-action lawsuits from homesellers, are centered around removing cooperative compensation offers from MLS listings and mandating explicit representation agreements between real estate professionals and buyers before touring a home.
As you meet with your team to talk through what these changes mean for your business, see these tips for understanding the mandate and explaining them to your clients.
Know the basics of the lawsuits–and practice explaining them
Odds are you or someone on your team will have a client who follows the news (or at least the headlines) and might have caught wind that there was a big lawsuit against the real estate industry. But they might not have all the facts or fully understand the changes, so be prepared to explain those to them.
When talking about the issue, It’s also an opportunity to clarify any negative perceptions of agents or the industry they may have (using the utmost politeness, of course).
You can even practice such conversations with your teammates–one of you playing the prospective client–to refine your skills at breaking everything down.
Cooperative compensation itself is not banned
An important nuance to the rule changes is that NAR has not banned cooperative compensation. Rather, offers of cooperative compensation can no longer be listed on NAR-affiliated MLSs.If your clients want to use cooperative compensation, then know that it’s okay to do so as long as it’s not via their NAR-affiliated MLS. This is a detail that everyone on your team should understand.
What agreements you need before officiating a client relationship
The other major rule change is that NAR-affiliated agents must obtain written buyer agreements before showing properties to clients. To capitalize on this rule change, entities such as Zillow have released boilerplate touring agreements documents for agents to use.
However, not all agreements are allowed by state or local regulations. So, make sure someone on your team does some double-checking before using any particular agreement. Alternatively, your team can assemble its own boilerplate agreement document to be used by all members. Whatever choice you make, understanding your touring agreement paperwork is key as clients will likely have several questions about them.
