T
he National Association of Realtors' (NAR) settlement with the government has had far-reaching consequences for the real estate industry. To avoid "extinction-level litigation," NAR agreed to pay $418 million and implement two key changes: removing offers of compensation from multiple listing services (MLSs) and requiring buyer agreements. While the settlement aimed to prevent lawsuits, it created new challenges for MLSs and agents.

    With only 150 days to overhaul their systems, many MLSs struggled to adapt to the new rules. Smaller MLSs, in particular, faced significant technical and compliance issues due to limited resources. Even larger MLSs like California Regional MLS (CRMLS) experienced hiccups, having to backtrack on a new feature that allowed agents to indicate concessions.

    The removal of commissions from MLSs has been deemed a "game-changer" by some industry leaders, but it also raises questions about the value of MLSs in a post-settlement world. Agents are already questioning whether their MLS membership is worth the cost without offers of compensation. Small MLSs may struggle to demonstrate their value and justify their existence.

    The new buyer agreement requirements have also created confusion and frustration among associations and brokerages. With no blueprint from NAR, they were left to create their own forms, resulting in a patchwork of agreements that may not comply with the settlement or state laws. Zillow was quick to introduce its own non-exclusive touring agreement, but it has yet to be challenged in court.

    The revision and scrutiny of buyer agreement forms will likely continue, especially given the Department of Justice's claim that they could be anticompetitive. Some industry leaders are calling on NAR to take a more active role in ensuring that forms are consumer-centric. The California Association of Realtors (C.A.R.) faced criticism over its buyer and listing agreement forms but has since released new versions.

    Other companies, such as eXp, have been praised for their simple and pro-consumer agreements. Law professor Tanya Monestier has also shared her own three-page version, which could serve as a template for compliant forms. However, it's likely that some noncompliant forms are still in use, which could lead to further litigation and complications for the industry.