R
eal estate professionals are discussing NAR's buyer-broker pay resolution, which will impact major residential real estate settlement changes. It's essential that businesspeople in the community understand this settlement regarding both residential and commercial transactions.

    Historically, commercial agents have offered upfront compensation and demanded written confirmation. However, with the new settlement, they'll be asking about compensation after "Is the property still available?" The settlement primarily affects NAR institutes, organizations, and councils, including affiliates CCIM and SIOR, applying to all their members' residential transactions.

    The proposed settlement by Sitzer-Burnett is for residential real estate only. Duplexes, triplexes, and quadplexes may be considered residential depending on the state; follow settlement processes on these to ensure compliance. Many markets offer commercial real estate on non-MLS platforms, so the settlement's MLS compensation removal regulations won't affect these listings.

    The new rule requires buyer-broker MLS participants to sign agreements before showing a home to a buyer and cannot list remuneration. As of Aug. 17, 2024, residential real estate transactions will be affected by this change. Commercial brokers don't need written agreements to show CRE properties to buyers for settlement compliance, but their brokerage may have different standards.

    Best Practices: Brokers and agents should address consumer questions upfront about the settlement to eliminate potential confusion later. Buyer brokers cannot postpone an offer even if compensation is not verified, as part of their fiduciary duty. Federal law bans both residential and commercial real estate agents from steering clients to compensation-only arrangements.

    While the NAR lawsuit settlement affects residential real estate, commercial brokers should still be prepared to address related questions. It's a good practice to educate all participants in the transaction and be patient with brokerages that haven't been educated about the settlement. By being respectful and proactive, you can help smooth transactions to a successful close.