A Closer Look at NAR's Proposed Settlement: Making Sense of What It Means for Buyers + Sellers

If you're on the pulse with real estate news, we're sure you've heard about the National Association of Realtors' recent settlement proposal. With all the buzz around it and speculation across the board, it can be tricky to make sense of what it truly means and how it affects both buyers and sellers moving forward.

If this is all news to you, we'll catch you up on the basics: the National Association of Realtors (NAR) recently proposed a settlement for a global lawsuit regarding agent compensation policies and home listing requirements. With court approval, the changes are scheduled to go into effect in mid-July 2024.

Sifting through the legal jargon and sometimes alarmist news articles can feel overwhelming and leave you wondering what exactly the proposed changes are and how they will affect you when you're buying or selling a property. We're here to break it down for you and help clarify the implications should the settlement be approved. 


1. Offers of compensation for buyers' agents cannot be communicated on the MLS. 

Currently, listings on the MLS share what the seller will pay an agent who brings a buyer. When a seller offers to compensate a buyer's agent, it is referred to as cooperative compensation. This stipulation in the settlement doesn't mean cooperative compensation will no longer be offered - it simply cannot be advertised on the MLS. And while it is currently allowed to be listed on the MLS, it is and always has been up for negotiation. Buyer's agent compensation will continue to be an option consumers can pursue off-MLS through negotiation and consultation with real estate professionals. 

2. MLS participants working with buyers will enter into written agreements with their buyers before the buyer tours a home.

The goal of this stipulation is to ensure buyers are aware of the agreement and agent compensation on the front end. Broker duties, buyer obligations, compensation, default rights, and key clauses are all outlined in a written agreement. This isn't new in Colorado. We're one of 14 states that already mandates buyer agreements. Here it is called the "Exclusive Right to Buy Agency Agreement," a contract you've signed if you've ever bought a property with a Colorado realtor. So while the change is new elsewhere, this wise practice has already been established here in colorful Colorado!


Sellers have always been able to choose whether or not (and how much) to offer a buyer's agent compensation, and that won't change should the proposed settlement be approved. Sellers will continue to have the right not to offer cooperative compensation, and their agents can help sellers determine what is in their best interests.

If buyer's agent compensation is not offered, homebuyers might choose not to have an agent represent them and broker their own transaction. That begs two questions: Is a buyer's agent beneficial to the seller? How does offering cooperative compensation benefit a seller? 

How does the seller benefit?

  • Cooperative compensation incentivizes buyers. If a seller offers to compensate the buyer's agent, it can increase the buyer's purchase power and likelihood of closing the deal. Offering compensation for the buyer's agent removes the financial barrier for the buyer and expands the market pool. 
  • Buyers' agents manage expectations and help get the home sold. They counsel and help their buyers find the right home, including managing buyers with those HGTV expectations. They offer professional expertise, counseling the buyer with hours of behind-the-scenes communication that moderates expectations and minimizes interactions on the seller side.

  • A buyer's agent uses their expertise to help streamline the process. They act as another party to find solutions to challenges that may come up while under contract (e.g. inspection, appraisal). An objective, trusted third party can help buyer's focus on health, safety, and realistic solutions after an inspection, helping set reasonable expectations and come to a solution for all parties. 


Before diving into the buying process and touring homes, buyers will sign a contract with their agent stipulating the terms and amounts for agent compensation; this practice (already established in Colorado) helps eliminate surprises for the buyer by detailing what services and value agents provide and for how much. The agent is clear up front, and the buyer can feel confident with expectations moving forward. The agreement details the terms of buyer's agent compensation, which can come directly from the seller (cooperative compensation), from the seller through concessions, or paid directly by the buyer. 

Some buyers may view the settlement as an opportunity to save money by brokering a deal on their own should cooperative compensation not be offered, losing out on the benefits of having a local agent guide and represent them through the buying process. While this has always been an option (just like selling a home by owner has), we truly believe in the value of a local buyer's agent for both the buyer AND the seller!

How does the buyer benefit?

  • A buyer's agent compensation is only paid if they close on a property. That means we're here for you every step of the way through your search, regardless of whether you make it to the closing table. Should you choose to submit offers independently, you'll need to enlist a real estate attorney who charges per offer written. A realtor will submit multiple offers without any charge and will only be compensated if they get their clients to closing. 
  • A local agent knows the market and has established beneficial relationships. Our real estate connections help us to know about off-market or soon-to-be-listed properties, giving buyers a leg up in their search. And our local relationships allow us to easily collaborate with local listing agents, HOA contacts, insurance providers, and lenders. Need help with repairs or scheduling an inspection? We can point you in the right direction. Relationships and resources help streamline the process and prevent costly missteps.
  • Buyer's agents create a personalized experience for the buyer. Agents build relationship with the buyers they work with and have their best interests in mind. They offer flexible hours to meet the needs of the buyer and work within the buyer's parameters and towards their goals. Should the buyer use an attorney and communicate directly with the listing agent, that personalized experience (and potentially closing on that dream property) is lost. 
  • Agents help buyers get the best value. We develop a market strategy based on current market conditions to help negotiate your transaction and optimize value. 
  • Experience and expertise help evaluate properties with your best interests in mind. We can objectively view a property you're considering for condition, value, and more - our knowledge of local HOA covenants, the ins and outs of neighborhoods and subdivisions, and red flags to look for given property type, age, and location brings a perspective only years of local real estate experience can. 
  • Your contract is managed and your earnest money is protected. Buyer's agents do the dirty work of you, essentially acting as a project manager while you are under contract. We manage and offer our expertise on disclosures, contingencies, due diligence, appraisals, inspections, surveys, financing, and escrow. And we put the 27-page purchase contract into language you can understand and take care of all of the deadlines, maximizing your odds of getting to the closing table and minimizing your stress along the way!
  • They remain a resource to the buyer after closing. A local agent is there for you every step of the process AND as a resource should  you have questions or need referrals after the sale.


One thing that is abundantly clear is that buyers and sellers will continue to have many choices when they choose to buy or sell a property. And having a local agent in your corner is key! We'd love to help you navigate your options and optimize your investment. If you have questions or are looking for advice on buying or selling a home after the changes go into effect, let's connect! Reach out to learn more or schedule a buyer or seller consultation. We're here to help you navigate these changes, support your goals, and streamline your buying or selling process! 

Posted by Leah Bishop on


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