For those buying or selling real estate and agents representing them on either side of the transaction, the landscape changed dramatically in May when the National Association of Realtors settled several class-action lawsuits over its compensation rules for sellers’ and buyers’ agents.

As part of the settlement, which went into effect in mid-August, NAR agreed to pay $418 million in damages and change how agents and realtors are compensated. That also means big changes for both sellers and buyers.

Under the new rules, sellers are no longer automatically required to cover the costs of agents’ fees for buyers, according to the NAR, while buyers must sign contracts before touring a property.

A statement from the Naples Area Board of Realtors states, “properties listed in the Southwest Florida Multiple Listing Service database will no longer include offers of compensation, and buyers who want to work with and be represented by a Realtor in their search for a home that they will eventually offer to purchase will be required to sign a written agreement with that Realtor and its brokerage prior to touring any home.”

That agreement, NABOR said, must outline the realtor’s scope of work and how much and by whom the realtor will be compensated.

“Another requirement is that Realtors—both as listing and buying broker and agent—must inform their customers that their compensation is not set by law and is fully negotiable,” the NABOR statement said. “This always has been the case in Naples but our updated forms further underscore that point.”

PJ Smith

NABOR President PJ Smith said the settlement relates to choices for consumers regarding real estate transactions.

“After the rule, listing brokers and their sellers can continue to offer compensation for buyer broker services, but they just can’t communicate this via our MLS. That’s a big change,” Smith said. “The other big change is that MLS participants or buyer brokers or agents acting for buyers have to enter into a written agreement with their buyer before touring a home, and that means a virtual tour or in-person tour. The goal is that consumers understand exactly what the services are, the value to be provided and how much the compensation [will be]. They have to identify that ahead of time.”

For buyers and their agents, Smith said there needs to be an understanding that “it can’t be just a general ‘let’s go look at a few houses.’”

“It has to address what services you’re providing, what’s your compensation and how it’s going to be paid,” she said. “Are we going to look for seller compensation? Or are you [buyer] going to pay it out-of-pocket?”

Smith said that while she is “not a huge fan of the settlement,” she thinks good will come of it in terms of agents’ relationships with buyers.

“That’s just a reiteration that compensation is always negotiable,” she said. “Always has been, always will be; it’s just a reiteration. Has it always been there? Absolutely. I think the hope was that it’s clear for the consumer that they have choices.”

Karen Coney-Coplin

Karen Coney-Coplin, a Realtor at Downing-Frye Realty Inc., said buyers will see the biggest changes, and open houses may become more popular since buyers will not be required to sign anything prior to attending one.

As to sellers, Coney-Coplin said, commissions have always been negotiable and not set by law. She said the listing agreement that was the basis for the NAR lawsuit had preprinted commission rates listed as “options” for St. Louis sellers.

“I have been involved in this industry in Naples since 2000, and we have never had a preprinted listing agreement stating commission rates, so for sellers this was a discussion then and remains one now,” she said. “Does it make sense for sellers to continue to offer compensation to buyer agents? Probably so in most cases. Since the settlement was put into effect on Aug. 17, the vast majority of properties I have shown to buyers do offer broker compensation. It’s also a recommendation I have made in most instances with my seller clients, who are free to proceed in this fashion or to offer concessions to buyers as another option. Listing agents cannot publicize that information in MLS but can reach out individually or in response to showing requests and inquiries from buyer agents.”

Sharon Zuccaro

Sharon Zuccaro, a partner in the real estate practice at Henderson, Franklin, Starnes & Holt in Fort Myers, is urging caution for potential buyers who have not previously had to sign a contract prior to touring properties.

“What we have now is before a buyer can tour a home, the buyer’s agent is required to have the buyer sign a written contract—and it is a contract,” Zuccaro said. “I always want to say, ‘buyer beware,’ because they really need to pay attention to the terms of the contract and what they are signing up for, because this is definitely new in the industry.”

Zuccaro said if a buyer is going to an open house or inquiring about a Realtor’s services, they are not required to sign a Buyer Broker Representation Agreement but will need to do so if a Realtor is taking them on a tour of a home—otherwise the broker can be fined.

“The buyer has to appreciate that they are responsible for the commission that is due to the agent if the buyer moves forward with a closing,” Zuccaro said. “So now the other part of this is, will the buyer be able to get compensation or reimbursement with respect to this commission that the buyer has now agreed to pay to his or her agent?”

She said she thinks many sellers are still going to be motivated to compensate buyers’ agents if they want to sell their properties.

“If the compensation isn’t there, the property may stay on the market longer, and the longer it stays on the market, the less of a purchase price the seller is going to command,” Zuccaro said.

Who is eligible for part of the National Association of Realtors settlement?

When it comes to the $418 million settlement NAR is required to pay, the following criteria must be met to be part of the settlement class, according to Zuccaro:

• Must have sold a home during the “Eligible Date Range”. (For the Naples area that period would be Oct. 31, 2019, to Aug. 17, 2024);
• Must have listed the home that was sold on a multiple listing service anywhere in the U.S.); and
• Must have paid a commission to a real estate brokerage in connection with the sale of such home.

Zuccaro said a settlement class member must file a Real Estate Broker Commission Claim Form to the Settlement Administrator by May 9, 2025.

The settlement class could have about 21 million members, meaning any payment after legal fees would be under $20.