NAR Settlement

REcolorado and the NAR Settlement

We strongly believe in being a business partner with the agents, brokers, and appraisers who use our service. For us, that means communicating clearly, openly, and immediately – sharing what we know when we know it!

The team at REcolorado has been pouring over legal documents, speaking with our legal team, connecting with industry experts, and listening to our customers to interpret what the NAR settlement means for REcolorado, our subscribers, and our specific market.

Key aspects of the settlement include:

  • A new rule will be put in place by NAR that prohibits offers of compensation on the MLS. Offers of compensation will no longer be permitted in any area of the MLS, which includes fields, written remarks, etc. Because this information is no longer collected, it will not be available in data feeds that are used by technology providers or portals.
  • The proposed NAR settlement stipulates that a written agreement needs to be in place with a buyer before the buyer tours any property. The agreement must disclose the amount or rate of compensation. This amount may not be open-ended. For example, it can’t indicate “…whatever the listing broker is offering.” 
  • A disclosure must be presented to buyers and sellers that indicates broker commissions are not set by law and are fully negotiable.
  • Sellers may offer buyer concession on an MLS (e.g. closing costs) so long as such concessions are not limited to or conditioned on the retention of or payment to a cooperating broker, buyer broker, or other buyer representative.

Questions and Answers

REcolorado will make appropriate changes to our policies and systems in early to mid August. We will provide advanced communication to managing brokers and all subscribers as timeframes become clearer.

REcolorado provides access and the same level of service to licensees and Realtors. The changes, if approved, will be put in place for all REcolorado subscribers no matter the business model they operate.

Yes. Offers of compensation can be pursued through negotiation and consultation with consumers and real estate professionals. Additionally, sellers can offer buyer concessions (concessions for buyer closing costs, for example). Compensation will continue to be negotiable and should always be negotiated between agents and the consumers they serve.

REcolorado will send managing brokers and all subscribers more information about concession field updates as more information is available.

According to the proposed settlement, written agreements will be required before touring a home.

No, open houses are held at the request of the seller and therefore it is not a buyer request to tour a home.

To streamline the process, REcolorado is working on a solution to make written agreements easily accessible.  

REcolorado takes a proactive, transparent, subscriber-focused approach to operating our business. As we monitored the lawsuits, this approach led us to strengthen our business-friendly, market-driven policies by removing the compensation requirement. As a result, REcolorado users will not see major changes as they use the MLS. As more details and clarity become available, we will continue to engage with our stakeholders, including brokers, agents, and partners, as we consider additional changes that are specific to our market.  We will also continue our long-standing tradition of providing the MLS perspective to the state licensing authority to promote consumer-friendly policies and practices.  

The REcolorado MLS does not require cooperative compensation. The value provided by REcolorado MLS is much greater than the offer of compensation. Our customers, consumers, and the industry rely on the MLS for accurate and fair access to all residential inventory, which facilitates cooperation among agents. That same inventory powers the tools, services, and insights that are used to facilitate the home buying and selling process. It also provides immense value to appraisers as they use comprehensive, accurate data to ensure timely and accurate valuations. The settlement strengthens the value a buyer’s agent brings to a real estate transaction and reinforces it in the buyer representation agreement. The MLS will continue to champion a transparent and efficient marketplace, giving all consumers equal and fair access. 

We have always viewed change as an opportunity to innovate. We’ve seen many industry shifts in our 40 years as an MLS and have used each to strengthen our commitment to being your MLS partner and grow stronger. The benefits you receive from REcolorado are rooted in our ecosystem of rich property data and modern services. You can count on REcolorado to be by your side as you manage your business from lead to close and beyond. 

The VA has temporarily lifted its ban on buyers directly paying for professional real estate representation until the agency deems it necessary to engage in a formal rulemaking process. The VA’s home loan guaranty is the only loan program with this explicit prohibition. Lifting the ban has signaled that veterans can still seek professional representation and access VA loans.

No, seller contributions of money to pay for buyer’s agent fees are not considered IPC and will not be considered in IPC limits for conventional mortgages.  Fannie Mae defines Interested party contributions (IPCs) as “costs that are normally the responsibility of the property purchaser that are paid directly or indirectly by someone else who has a financial interest in, or can influence the terms and the sale or transfer of, the subject property.” Compensation paid to the buyer for the buyer agent fees falls outside IPC amount. Speak with your mortgage lender for specific questions and situations.