NAR Settlement

Key Takeaways

• The NAR settlement resolved the Sitzer/Burnett antitrust class action over broker commissions; NAR agreed to pay $418 million over approximately four years into a settlement fund.
• The practice changes took effect August 17, 2024: an MLS may no longer carry an offer of compensation, and a broker working with a buyer must have a written agreement in place before touring a home.
• Compensation was not capped or standardized. It remains negotiable and may still be offered outside the MLS, through a listing broker's website, signs, flyers, or direct communication with the buyer's broker.
• Washington already required written brokerage services agreements as of January 1, 2024 under chapter 18.86 RCW as amended by 2023 c 318, more than seven months before the settlement's practice-change date.

What It Means

The NAR settlement is the 2024 agreement that ended the Sitzer/Burnett antitrust class action against the National Association of Realtors over how buyer-broker compensation was set and shared. NAR agreed to pay $418 million over approximately four years into a settlement fund, and the U.S. District Court for the Western District of Missouri granted final approval on November 26, 2024. That payment bought a release of liability for more than 1.4 million NAR members, all state, territorial, and local Realtor associations, Realtor multiple listing services, NAR's affiliate organizations, and brokerages with an NAR member as principal whose 2022 residential transaction volume was $2 billion or below.

The money is not the part that changed daily work. The settlement also required practice changes, and those took effect on August 17, 2024. Two of them touch nearly every transaction. A Multiple Listing Service may no longer carry an Offer Of Compensation from the listing side to the buyer's side, and a broker working with a buyer must have a written agreement in place before touring a home.

Neither change sets or caps a commission. The required buyer-agreement disclosure states the amount or rate of compensation, or how it will be determined, together with a conspicuous statement that compensation is not set by law and is fully negotiable.

How It Works in Washington

The settlement is a private legal agreement, not a statute. It binds through NAR policy and MLS rules rather than through a state license law, which is why a state's own requirements still control what a broker must do. In Washington the statutory layer arrived first. The legislature rewrote chapter 18.86 RCW in 2023 (2023 c 318), and the note following RCW 18.86.010 states that the act takes effect January 1, 2024, more than seven months before the settlement's August 17, 2024 date.

• RCW 18.86.020(2)(a) requires a firm to enter into a services agreement with the principal before, or as soon as reasonably practical after, its appointed broker commences rendering real estate brokerage services.
• RCW 18.86.020(2)(b) sets the contents, including the term of the agreement with a default term of 60 days when the principal is a buyer and the option of a longer term, the identity of the appointed broker, whether the relationship is exclusive or nonexclusive with checkbox options for a buyer, and the principal's consent to limited dual agency.
• RCW 18.86.080(7) ties pay to the paperwork. To receive compensation from any party or firm, a firm must have a services agreement stating the amount the principal agrees to compensate the firm, the principal's consent and terms for compensation sharing between firms and parties, and the principal's consent and terms for compensation of the firm by more than one party.
• RCW 18.86.080(7)(b) asks the question the settlement later forced everywhere else: in a services agreement with a buyer, whether the appointed broker agrees to show the buyer properties if no party or firm offers to pay compensation to the firm.
• RCW 18.86.020(3) carves out one case. A services agreement is not required when a broker performs real estate brokerage services as a buyer's agent solely for commercial real estate.

So a Washington broker met the settlement's written-agreement requirement on top of an existing state requirement rather than in place of it. The state paperwork is the Written Services Agreement, and our guide to Washington's new agency law walks through the form itself.

Example

Marcus is a Washington broker. On September 5, 2024, buyer Jenna calls about a $565,000 townhouse in Everett and wants to see it Saturday. Before the tour, they sign a buyer services agreement: a 90-day term, longer than the 60-day default RCW 18.86.020(2)(b) supplies, an exclusive relationship selected by checkbox, and compensation to Marcus's firm of 2.5 percent of the purchase price, which on $565,000 comes to $14,125.

The listing says nothing about buyer-side pay, because after August 17, 2024 the MLS cannot carry an offer of compensation. Marcus calls the listing broker and learns the seller is willing to contribute 2 percent, or $11,300 at this price. That leaves a $2,825 gap between what Jenna agreed her firm would be paid and what the seller will cover.

Jenna has choices, and this is where the written agreement earns its keep. She can pay the $2,825 difference at closing, ask for a Seller Concession large enough to cover it, or renegotiate the 2.5 percent with Marcus before writing the offer. What she cannot do is assume the number was fixed by somebody else. RCW 18.86.080(7) put the amount in her agreement in the first place, and the settlement's own disclosure says compensation is not set by law and is fully negotiable.

Common Mistakes and Exam Traps

• The August 17, 2024 changes removed offers of compensation from the MLS. They did not ban a seller or listing broker from offering compensation, which may still be communicated off-MLS through a website, signs, flyers, or direct contact.
• The settlement did not set, cap, or standardize commission rates. The disclosure it requires says the opposite: compensation is not set by law and is fully negotiable.
• Washington's written services agreement requirement comes from chapter 18.86 RCW effective January 1, 2024, not from the settlement, so it reaches a licensed Washington broker regardless of whether that broker is a Realtor.
• The release covers NAR members, associations, Realtor MLSs, and brokerages with 2022 residential volume of $2 billion or below, so brokerages above that volume were not covered by it.