NAR’s attorneys outline deadlines, practice considerations and ethical duties in a wide-ranging legal update.
NAR legal team at RLM Legal Update
NAR’s legal team, headed by Chief Legal Officer Katie Johnson, third from right, discuss practice changes at the Legal Update session during the 2024 REALTORS® Legislative Meetings.

The new practices changes coming in August place a renewed focus on having deliberate conversations with buyers and sellers , legal experts said Sunday during the REALTORS® Legislative Meetings in Washington, D.C. Clarifying your services and value—while ensuring that you continue to meet fair housing requirements—will be paramount as real estate professionals navigate the practice changes and negotiations with their clients.

“The hallmark of fair housing is consistency,” Alexia Smokler, director of fair housing policy and programs at the National Association of REALTORS®, told a packed crowd at the Legal Update session. With various compensation options available to consumers, there will be many opportunities for disparate treatment of buyers, sellers and other agents, she added. “Differential treatment may well lead to feelings of unfairness or actual discrimination in some cases.”

Smokler described specific challenges when working with military veterans, noting that NAR continues to work with VA and Congress to help facilitate professional representation for veterans just like any other buyer. Under current law VA loan borrowers aren’t allowed to pay for the services of a buyer’s representative.

Ken Fears, NAR’s senior policy representative for banks, lending and housing finance, delved into interested party contributions (IPCs): Fannie Mae, Freddie Mac and the FHA specify limits on how much a seller or broker can contribute to the buyer to pay for services typically paid by the buyer. “We don’t expect compensation paid by a seller or listing broker to a buyer broker to become an IPC,” Fears said. He also highlighted NAR’s efforts with the lending community to gain greater clarity and maintain the steady flow of funding for closing home purchases, emphasizing how NAR will continue to advocate for policies that could benefit potential home buyers and expand homeownership opportunities for all Americans.


REALTOR® Magazine will continue to bring NAR members guidance on how to implement these new practice changes. Subscribe to the Navigate With NAR newsletter for daily updates.


Stressing facts.realtor as a reliable resource for information on NAR’s settlement agreement, NAR Chief Legal Officer Katie Johnson thanked attendees for their “commitment to our profession, our industry and the REALTOR® organization.” Johnson and NAR General Counsel Lesley Muchow discussed upcoming milestones in the settlement approval process, including a Nov. 26 hearing regarding final approval of the NAR settlement. The settlement received preliminary approval on April 23, which triggered the date of August 17, 2024 as the earliest date of class notice.

Muchow reinforced how the settlement achieved two important goals that NAR sought from the start of the litigation:

  1. To secure a release of liability for as many NAR members, associations and MLSs as possible.
  2. To preserve the choices consumers have regarding real estate services and compensation.

While highlighting the major terms of the settlement—including the release of liability for the vast majority of members, moving offers of compensation off of the MLS and requiring written buyer agreements—Muchow also delved into the timing of when practice changes would go into effect.

  • REALTOR®-owned MLSs must implement the practice changes by Aug. 17 to be in compliance with mandatory national policy.
  • NAR strongly recommends that all MLSs opting into the settlement implement the practice changes by Aug. 17, even though the settlement provides MLSs an extra 30 days (until Sept. 16) to implement the practice changes to be released under the settlement.

NAR Staff Attorney Mike Rohde said those who want to be covered by the settlement must be NAR members as of the date of class notice. The length of NAR membership at that time does not matter, only that one is a member on the date of class notice. Rohde also noted that, to be covered, MLSs and brokerages choosing to opt in must complete the necessary appendices to NAR’s settlement agreement. The appendices and instructions are at facts.realtor.

Turning to the new requirement regarding written buyer agreements, NAR Senior Counsel Deanne Rymarowicz reviewed the terms that would trigger the requirement:

  • “Working with”: This language is intended to distinguish MLS participants who provide brokerage services to a buyer from those MLS participants who simply market their services or just talk to a buyer.
  • “Tour”: Touring a home is when the buyer and/or the MLS participant, or other agent at the direction of the MLS participant, enter the house. This includes when the MLS participant or other agent, at the direction of the MLS participant, working with the buyer enters the home to provide a live, virtual tour to a buyer not physically present. In an increasingly connected world, this clarification is necessary.
  • “Home”: A home is a residential property consisting of not less than one not more than four residential dwelling units.

One of the practice changes members are asking about most is the requirement that offers of compensation be made off of the MLS. NAR Senior Counsel and Director of Legal Affairs Charlie Lee stressed that compensation for brokers can be negotiated in consultations with clients. Notably, sellers can continue to offer buyer concessions on the MLS subject to their MLS’s local rules and provided that the concessions are not conditioned on the use of or payment to a buyer broker. Lee reiterated that the settlement does not change the ethical duties that REALTORS® owe their clients, highlighting how protecting clients’ interests and behaving with honesty remain cornerstones of the REALTOR® Code of Ethics.

Muchow acknowledged that the practice changes “will be a new experience for many sellers, buyers and practitioners. But while it may be new in practice, it is firmly within the spirit of the ethical and expert service NAR members provide to consumers.”

Johnson reminded attendees that NAR is offering the Accredited Buyer’s Representative designation course at no cost to members through the end of the year. “As REALTORS®, we are always required to protect and promote the interests of our clients and treat all parties in a transaction in an honest manner. We should continue to use our skill, care and diligence to protect our clients’ interests. This is what sets us apart as members of the National Association of REALTORS®, and we should continue to carry these values forward in our work.”

Advertisement