Communicating Offers of Compensation

Starting Aug. 17, the MLS will no longer be a platform for communicating offers of compensation. However, compensation offers still remain an option.

Under practice changes taking effect Aug. 17, real estate professionals will no longer be able to communicate offers of compensation through the MLS. However, consumers can still pursue compensation offers off-MLS through negotiation and consultation with their real estate professionals.

Updated MLS Policies

MLS policies have been updated to reflect these changes under the proposed settlement agreement. The National Association of REALTORS® (NAR) has developed a series of “Window to the Law” videos to explain the upcoming changes. The first video focuses on compensation, emphasizing that it is, and always has been, negotiable.

Ways To Negotiate and Communicate Offers of Compensation

According to Charlie Lee, NAR’s senior counsel and director of legal affairs, real estate professionals can negotiate and communicate offers of compensation in several ways:

  1. Marketing:
    • If the listing broker or seller is offering compensation for the buyer’s broker, the listing agent can share that offer through marketing materials such as flyers, signs, or emails.
  2. Website Displays:
    • Brokers can display offers of compensation for their listings on their website. However, they must not display offers of compensation for other brokers’ listings unless it is not derived from MLS data or an MLS feed.
  3. Seller Concessions:
    • Sellers may offer concessions to the buyer, such as paying for the buyer’s closing costs or the commission for the buyer’s agent. If allowed by the local MLS, these concessions can be communicated within designated MLS fields. However, any listed concessions cannot be conditioned on the use of or payment to a buyer broker.
  4. Negotiations:
    • Buyers can request that their agent include broker compensation as part of the terms of a purchase offer.
  5. Buyer Agreements:
    • The proposed settlement agreement by NAR will require buyers and their agents to enter into written agreements before touring homes. These agreements will detail the compensation for using the buyer broker’s services.