NAR Claps Back on 6% Commission Requirement Reports, Corrects the Record by Stating NAR Does Not Set Commissions

CHICAGO—In response to recent press reports that characterized its settlement in broker commission litigation brought by homeowners as “the end of the 6% commission,” the National Association of Realtors issued a lengthy statement today that it does not set commissions—they are negotiable.

NAR President Kevin Sears in an email message to NAR members stated that since Friday’s settlement announcement, many members have reached out to its Leadership Team with questions. He noted that there has been “persistent inaccurate reporting suggesting that NAR rules set commissions at 6%.”

“The rule that has been the subject of litigation requires only that listing brokers communicate an offer of compensation. That offer can be any amount, including zero. And other rules throughout the MLS Handbook and NAR policy expressly prohibit MLSs, associations, and brokers from setting or suggesting any such amount that should be included in that field,” NAR stated in a press announcement.

NAR also provided the text of the current rule (excerpted below), the text of the MLS Antitrust Compliance Policy (excerpted below) and a notice included in NAR’s MLS Handbook (below).

“Again, the current rule that has been the subject of litigation does not set commissions,” NAR stated. “As reflected in our release about the proposed settlement agreement, NAR has agreed to put in place a new MLS rule prohibiting offers of broker compensation on the MLS. Commissions remain negotiable, as they have been.”

“Excerpt from Handbook on Multiple Listing Policy – Commission/Cooperative Compensation Offers, Section 1: Information Specifying the Compensation on Each Listing Filed with a Multiple Listing Service of an Association of Realtors

In filing property with the multiple listing service, participants make blanket unilateral offers of compensation to the other MLS participants and shall therefore specify on each listing filed with the service the compensation being offered by the listing broker to the other MLS participants. This is necessary because cooperating participants have the right to know what their compensation will be prior to commencing their efforts to sell.

The listing broker retains the right to determine the amount of compensation offered to subagents, buyer agents, or to brokers acting in other agency or nonagency capacities, which may be the same or different.”

“Excerpt from Handbook on Multiple Listing Policy – MLS Antitrust Compliance Policy

The purpose of multiple listing is the orderly correlation and dissemination of listing information to participants so they may better serve the buying and selling public. Boards and associations of Realtors and their multiple listing services shall not enact or enforce any rule which restricts, limits, or interferes with participants in their relations with each other, in their broker/client relationships, or in the conduct of their business in the following areas.

Boards and Associations of Realtors and their MLSs shall not:

1. Fix, control, recommend, or suggest the commissions or fees charged for real estate brokerage services (Interpretation 14).
2. Fix, control, recommend, or suggest the cooperative compensation offered by listing brokers to potential cooperating brokers.”

“Excerpt from Handbook on Multiple Listing Policy – Notice to Association Members

Under the long-established policy of this association, the (state) association of Realtors, and the National Association of Realtors:

1. The broker’s compensation for services rendered in respect to any listing is solely a matter of negotiation between the broker and his or her client and is not fixed, controlled, recommended, or maintained by any persons not a party to the listing agreement.
2. The compensation paid by a listing broker to a cooperating broker in respect to any listing is established by the listing broker and is not fixed, controlled, recommended, or maintained by any persons other than the lister broker. (Amended 4/92)

NAR President Sears stated that to help address frequently asked questions and support your ongoing conversations, a set of updated FAQs, can be accessed at facts.realtor. NAR has removed the login requirement for the site. He also recommended members continue to reference the fact sheet, settlement agreement, press release, and his video with NAR Chief Legal Counsel Katie Johnson, all of which are available on facts.realtor, as well.

Sear concluded his email message to members by saying, “While the settlement will bring changes for all of us, it also allows us to move forward and continue doing our jobs. In the coming days, we’ll be sharing more materials and scheduling additional briefings and town halls. Thank you for your continued hard work in service of our industry, and please continue to reach out to me, as well as other NAR leaders, if you need support.”