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There’s a lot of confusion around the particulars of the National Association of Realtors (NAR) commission lawsuit settlement and the resulting business practice changes. Compliance expert Summer Goralik is here to help clear up some of the looming questions so that we can move forward together as an industry.
Read the entire series.
This week’s question
Can I say “call for buyer’s agent compensation” in the private remarks?
Compliance expert answer
This question caught my attention for two key reasons. First, it can be answered in just one word. Second, while the answer is straightforward, it highlights a deeper, more complex issue regarding compensation offers in today’s real estate industry. Let’s break it down.
To begin with, here’s a quick recap of recent events. The practice modifications resulting from the National Association of Realtors (NAR) settlement took effect on Aug. 17.
By now, all Realtors and multiple listing service (MLS) participants should be adapting to this new landscape, which emphasizes the decoupling of real estate commissions and a more consumer-focused approach. Fully embracing these changes is essential to avoid future litigation and antitrust issues.
Now, regarding the question of whether a licensee can input “call for buyer’s agent compensation” in the private remarks of a listing on the MLS, the answer, in my opinion, is an unequivocal no.
Although I’m not an attorney, here’s why I strongly advise against this practice:
- NAR settlement compliance: The NAR settlement prohibits unilateral offers of compensation through the MLS. As a result, offers of compensation cannot be advertised on, or facilitated through, the MLS.
- MLS policy and enforcement: MLS platforms nationwide have been removing commission fields and modifying their rules to comply with this new requirement. For example, the California Regional MLS (CRMLS) has modified or enacted rules in response to the NAR settlement, including Rule 7.15. This rule explicitly states that a listing broker cannot use the MLS to offer or convey any amount or willingness to share a commission with a buyer broker, nor can a seller offer a specific compensation amount to a buyer broker.
Given this, any mention of agent compensation in the private remarks would likely be flagged by MLS enforcement, potentially leading to fines. It’s an easy target for MLS compliance teams, and such a non-compliant listing would almost certainly be reported by other practitioners, especially in this heightened regulatory environment.
It’s also important to note that peer enforcement may increase during these early months as agents and brokers learn to navigate and apply these significant changes to their operations. The interpretation of these rule changes, as seen in the proposed activity discussed in this week’s question, is where we may encounter a range of questionable conduct.
- Broker accountability: If an agent is found to be non-compliant, their responsible broker will likely be displeased, especially if policies and procedures were established to guide agents through this transition. Responsible brokers are expected to oversee their agents to ensure compliance, and disciplinary measures may be in place for agents who fail to follow the rules.
Now that I have answered the primary question, I will explore the underlying issue that can’t be ignored.
Admittedly, when I think about this moment of critical change and all the ways agents might accidentally get it wrong or react improperly, the private remarks on the MLS aren’t the issues that keep me up at night. Blame it on my compliance background, but I tend to focus on the more serious aspects of this question.
The real issue isn’t just whether you can advertise buyer agent compensation in MLS remarks — it’s whether you should be advertising offers of compensation at all.
According to NAR’s frequently asked questions (FAQs) available on its website, offers of compensation, including cooperative compensation, aren’t outlawed, but they are prohibited from being displayed or facilitated on the MLS. Theoretically, this leaves some leeway for agents and brokers to advertise compensation through other channels, such as websites, signage and social media.
However, if you follow the logical path — or what some might call a “rabbit hole” — that this question leads us down, there are broader implications to consider.
Despite NAR’s guidance that cooperative compensation isn’t illegal, there are strong warnings and narratives advising against it.
For example, some state associations initially revised their forms to remove all references to compensation tied to the MLS but have since gone further by removing broker-to-broker compensation altogether. At least, that was the case in California.
Complicating matters further, consumer watchdog groups like Consumer Advocates in American Real Estate (CAARE) offer advice that differs from NAR’s. Its website provides guidance and suggestions for both sellers and buyers in the post-NAR settlement era.
Not only do they argue against cooperative compensation, labeling it as collusion, but they also suggest that sellers should not offer compensation to buyer brokers upfront, as it can artificially inflate fees. Instead, they recommend negotiating these terms during the offer process and emphasize that offering compensation directly to buyer brokers may not be in the seller’s best interest.
Similarly, some leaders in the real estate industry argue that advertising any kind of buyer agent compensation or concessions in advance of offers is actually a disservice to the homeseller and works against an agent’s fiduciary duty owed to their principal.
As someone with a background in real estate compliance, I can’t help but think about the larger legal concerns that even simple questions can raise. Whether that’s a talent or a curse, I’m not sure.
Although I don’t have all the answers, I am certain that practitioners will need to dig deeper, expose the more challenging questions, and by extension, address the most paramount compliance concerns. Agents must work closely with their responsible brokers, legal counsel, and trusted advisors to implement these practice changes and ideally avoid crossing the line into regulatory trouble or litigation.
Part of my ongoing wish list for the industry is clear, consistent guidance that aligns with the standards set by the United States Department of Justice and watchdog organizations. The sooner agents receive uniform direction, the better it will be for everyone involved.
I believe that agents are committed to doing the right thing, but their success depends on having explicit instructions on how to get it done right, as well as clarity about prohibitive behavior that could result in compliance issues or legal risks.
Editor’s note: Licensed real estate agents should always check with their responsible brokers for guidance, direction and policy regarding the new practice changes, and licensed real estate brokers would be wise to consult with a licensed attorney for legal clarification and support.
The opinions, suggestions or recommendations contained in this discussion are based on Summer Goralik’s experience working for, and knowledge of the laws enforced by, the California Department of Real Estate and must not be considered legal advice or relied upon as legal advice. You should consult with your brokerage, and/or appropriate legal counsel in your jurisdiction, for further clarification.
Summer Goralik is a real estate compliance consultant and former CA DRE Investigator in Huntington Beach, California. Connect with her on LinkedIn.
