NAR Settlement Information and Resources

MNR Statement on NAR Settlement

The National Association of Realtors® has reached a settlement agreement—which is still subject to court approval—that ends ongoing litigation brought on behalf of home sellers related to broker commissions. For over 30 years, Minnesota has protected consumers through strong buyer agency laws. Minnesota Realtors®’ contracts aid these protections. It is important to clarify that real estate commissions are now, and have always been, negotiable between agents and consumers. Realtors® remain committed to helping consumers make critical decisions during one of the largest investments of their lives. Their experience and market insights are invaluable when buying or selling a home. 



What you need to know

Highlights: 

  • NAR settlement releases NAR and all brokerage entities, who have an NAR member as principal, with a residential transaction volume in 2022 of $2 billion or less. 

  • All Realtor® associations and MLSs owned by one or more Realtor® associations also released from liability. 

On March 15, 2024, NAR released their proposed settlement agreement that would end litigation of claims brought on behalf of home sellers related to broker commissions. Although plaintiffs in these cases have agreed to the Settlement, it still requires court approval before becoming final, a process that may take a few months. 

This settlement would release NAR and all brokerage entities, who have an NAR member as principal, that had a residential transaction volume of $2 billion or less in 2022. All Realtor® associations and MLSs owned by one or more Realtor® associations are also released from liability. Other non-Realtor® Association-owned MLSs can opt into the settlement as well. As was noted in the NAR settlement statement, the cases are still active against brokerages and entities that have not settled. Further, this settlement is related to seller paid brokerage commission class action cases. 

What will change

Highlights

  • The offer of compensation fields from one broker to another will be removed from the MLS 

  • Blanket offers of cooperating compensation from one broker to another will not be allowed in any field on the MLS. 

  • Offers of cooperating compensation must be conveyed through another medium. 

  • Changes go into effect mid-July 2024 

As part of the settlement, NAR has agreed to make substantive rule changes for cooperating compensation for transactions beginning in mid-July 2024. Although cooperating compensation is still permitted by Minnesota law, MLS, and NAR rules, how this compensation is communicated and secured will change. There will no longer be a field for offers of compensation from one broker to another on the MLS. Further, blanket offers of cooperating compensation from one broker to another will not be allowed in any field on the MLS.   

Therefore, offers of cooperating compensation will need to be conveyed through another medium. There is still a potential for a “Seller Paid Concession” field to be displayed on the MLS, but it’s not required by the settlement agreement and would not be consider binding on parties to a transaction unless included in a subsequent written agreement between parties. Further, the seller would not be able to condition the “Seller Paid Concession” on the buyer based on whether they were being represented by another agent.  

Also, the agreement requires Realtors® to enter into a written agreement with buyers before showing them any properties. Again, in Minnesota we have been requiring signed buyer representation agreements on residential transactions for 30 years, but the new rule will emphasize the timing of securing these agreements. This may require a change in how some brokers handle buyer representation along with changes to MNR contracts for facilitation and exclusive or non-exclusive representation.   

What does it mean for Realtors® in Minnesota? 

Highlights

  • Under the proposed settlement, most Realtor® members would be released from lawsuits related to seller paid commissions—especially in a class action format 

  • Compensation will now need to be handled directly between all parties for each transaction  

  • Written representation contracts needed to show buyers properties

Assuming court approval, there is good news: The Settlement releases liability for most Realtor® members from lawsuits related to seller-paid commissions—especially in a class action format. This was the main reason NAR decided to settle.   

It also means that we will have to adjust our business practices, shifting from how things have operated over the last 30 years or so. There will be changes in the presentation of cooperating compensation offers, requiring new discussions with clients regarding compensation practices. 

Also, the agreement requires Realtors® to enter into a written agreement with buyers before showing them any properties. Again, in Minnesota we have been requiring signed buyer representation agreements on residential transactions for 30 years, but the new rule will emphasize the timing of securing these agreements. This may require a change in how some brokers handle buyer representation along with changes to MNR contracts for facilitation and exclusive or non-exclusive representation. 

Our diligence in serving our clients’ needs has not changed. This settlement presents an opportunity to  develop new ways to ensure our clients get the services they need, especially the traditionally underserved communities that need  expertise only Realtors® can provide.   

What is Minnesota Realtors® doing?

Highlights

  • MNR Forms Committee is already at work addressing these potential changes 

  • MNR Communications and Education teams will continue to deliver timely information and education that covers changes 

  • MNR Governmental Affairs team continues monitoring legislation and lobbying on behalf of members 

With changes to compensation, there will be a need to update current forms while also potentially creating new forms. Our Forms Committee is already at work addressing these potential changes and will, as soon as possible, provide those forms changes to our members.  

MNR’s Communication and Education teams are working to deliver crucial information and provide comprehensive education regarding the changes associated with the settlement. We remain committed to ensuring our members are fully equipped to navigate the transition seamlessly when the new rules take effect in mid-July 2024. 

Our Government Affairs team is monitoring legislation and lobbying on behalf of members to ensure the requirements needed to successfully manage this transition are in place.  

Our staff and leadership are continuing to cooperate with NAR and other State Associations to make sure we have the most current information and know how best to lead you through these changes. 

REALTOR® RESOURCES



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Questions? 

If you have questions about the NAR settlement and proposed rule changes, please contact us by email at questions@mnrealtor.com or via the button below. Our legal team will review all questions and respond as we are able. 

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