How Does the NAR Lawsuit Settlement Effect Real Estate in Washington?

Sellers have been asking me what changes in compensation policy and practice will result from the pending National Association of Realtors (NAR) lawsuit settlement, for which the final settlement is scheduled to occur in November 2024.

Washington State Law now mandates that all agents (in Washington, all agents are called Brokers) must enter into a written services agreement at the beginning of a relationship with a Buyer. The agreement must address Broker compensation and details of representation.

NWMLS, to which I and my company belong along with approximately 10,000 other brokers in the state, has led the industry with initiatives that afford sellers and buyers transparency, meaningful choice, and clear opportunities to negotiate their broker’s compensation. Sellers are able to negotiate how much to compensate the listing firm and decide whether to offer to contribute toward the buyer’s broker compensation and the amount of any such offer. Buyers agree on how much to pay their own brokers at the outset of their relationship and can then negotiate for the seller to help cover that cost as part of the purchase.

NWMLS will not “opt-in” to NAR’s proposed settlement agreement as many of our current rules and practices are being duplicated in the settlement, with one main exception. The settlement agreement eliminates compensation transparency for buyers and restrains sellers’ choice by prohibiting sellers from making offers of compensation through the MLS. This will force “off MLS” negotiation, which is not likely to be available to all buyers and brokers. This is clearly detrimental to consumers and brokers alike. This means NWMLS will continue to publish sellers’ offer of compensation if any.

Stay tuned… I am sure there will be more changes and refinements made as we proceed through the year.