A proposed settlement from the National Associations of Realtors could result in changes surrounding buyer representation agreements and compensation.
The NAR settlement, which still needs to be approved, would prohibit offers of compensation from listing agents to buyer agents in the Multiple Listing Service, the free marketplace to showcase listing to other brokers. The MLS provides the buyer's agents information about a property that may not be available to the public.
In that system, an offer of compensation for a broker is made by the listing agent. According to Ashleigh Fordham, president of the Oregon Realtors Association, the courts determined that was a violation of antitrust. Negotiations of compensation to a buyer broker can take place outside of the MLS under the settlement changes.
"The biggest misconception about this settlement and these lawsuits lawsuits is that there was ever a set amount of commission. It was always negotiable," said Fordham. The seller would instead agree to pay their agent whatever their agreement comes to.
"Although I do think that more transparency was needed with the old way, this new way is going to be more transparent but also far more confusing for buyers and sellers," said local real estate agent John Kromm.
The buyer will enter what's called a Buyer Broker Service Agreement, which outlines the offer of compensation, as well as the services that will be provided. A buyer will have the ability to navigate the negotiation of that payment with the agent.
"It's a very complicated issue," said Fordham. "I don't think that it's going to necessarily change things for buyers and sellers too much, but it's certainly going to add layers of complexity when it comes to negotiating compensation for agents."
The settlement would also require MLS participants to use buyer representation agreements, which provide an overview of expectations of representation on both sides. Oregon passed House Bill 4058 in in March, requiring the same thing. This will go into effect in January 2025.
"I'm quite frankly excited about the agreements becoming a standard of our practice," said Fordham. "It creates choice and clarity for the consumer."
