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Rhonda Burnett is a mother and former school psychologist. Jeremy Keel is an attorney specializing in elder law. Jerod Breit serves as executive director of Mothers Against Drunk Driving. Hollee Ellis worked as a high school teacher for many years.

These four people come from different backgrounds, different ages, and in different universes, and may never intersect. But in our timeline, they have one thing in common that brings them together: They both bought houses and then sued over the commissions they had to pay.

Burnett, Keel, Bright and Ellis are among the many consumers behind numerous antitrust lawsuits that have rocked the real estate industry. The lawsuits focus on how attorneys are paid, and after years of litigation, several major settlements were reached this year. Among the most notable were settlements reached between plaintiffs in multiple cases and the National Association of Realtors (NAR), which included NAR agreeing to change various rules.

This weekend is the deadline for these rules to take effect. The deadline sparked a race to the finish line as multiple listing services updated forms and issued stern warnings and NAR scrambled to educate the public. Meanwhile, industry leaders are spending considerable effort to allay concerns, while agents discuss the impact in online forums.

All of this suggests that consumers like Burnett, Keele, Bright and Ellis have forced the real estate industry into a brave new world. In both virtual and physical venues, the changes taking place now are widely considered the most significant evolution in the home-selling industry in at least a generation.

To find out what’s happening now, Inman contacted key players and agents across the United States.

• First, several listing services responsible for actually implementing the new rules are already rolling out the changes. And the end of the world hasn’t come yet.
• But secondly, some in the industry say confusion remains. So as the dust settles, real estate practitioners need to remain cautious.

What happened?

Realtor-affiliated MLSs have until Saturday, August 17 to comply with rule changes set by the National Association of Realtors. Supporters say the changes have the potential to upend the way real estate agents and brokers are paid across the country and could save consumers tens of billions of dollars if overall commissions fall.

NAR leadership set an August deadline before a Nov. 26 hearing in which a federal court will consider whether to give final approval to the settlement.

In the coming months, industry observers, including the U.S. Department of Justice (DOJ), will likely keep a close eye on the implementation of the new rules and their impact on consumers before deciding whether to potentially pursue further changes.

Until then, the MLS has until Saturday to implement the following major changes:

• eliminate any Require A compensation offer made in the MLS between the listing agent or the seller and the buyer’s agent. Previously, NAR’s Rules of Engagement (also known as the Partnering Compensation Rule) required listing brokers to compensate buyer’s brokers for submitting listings to the MLS.
• Agents, brokers and sellers prohibited make Any compensation provided to the buyer’s agent in the MLS, and the disclosure of listing agent compensation or general agent compensation in the MLS. This requires the MLS to eliminate all broker compensation data fields in the MLS.
• MLS Must not help An agent, broker or seller makes a compensation offer to a buyer’s broker through any non-MLS mechanism, such as by providing MLS information to a website that serves as a platform for multiple brokers to provide compensation.
• Request an agent to work with the buyer Sign a written agreement Before a buyer visits any home. If the agent or broker will receive compensation from any source, the written agreement with the buyer must specify the amount or rate of compensation to be received or how the amount will be determined. The amount must be “objectively determinable” and cannot be “indefinite”. The deal also provides that the agent or broker may not be compensated for brokerage services in excess of the amount or rate agreed upon in the buyer’s agreement.
• Ask the agent and broker representing the seller to put in writing:Make “obvious disclosures” to sellers and obtain their approval Any payment or offer to pay made by the listing broker or seller to the buyer’s representative. They must also specify the payment amount or rate.
• Request agents and brokers prominently disclosed Recommend to potential sellers and buyers that “agent commissions are not required by law and are fully negotiable.”
• MLS MUST NOT provide the ability to filter out or limit MLS listings communicated to consumers based on the compensation provided to the buyer’s broker or the name of the broker or agent.

In order to comply with the terms of these settlements, some MLSs have imposed hefty fines. Some also allow subscribers to advertise that sellers are willing to consider concessions to buyers, who can choose to use them for buyer’s agent compensation.

Additional resources:

MLS races for change

Many MLSs have begun rolling out rule changes in recent weeks and months as the August 17 deadline approaches. Executives say the world has not ended yet.

• For example, interbank lending rateThe broker-listed cooperative serving Indiana rolled out the changes on July 1. In the 30 days after the buyer agent compensation field was removed, agents added an additional 4,400 listings.
• MIBOR CEO says: “There were about 9,000 opportunities to do something wrong that month” Shelley Specchio Tell Inman. “We only had 39 compliance tickets – 39 people we had to contact and explain to them why they couldn’t do what they wanted to do.”
• this California Regional Multiple Listing ServiceThe largest MLS in the United States will be updated online on August 13th. Art CarterThe CRMLS CEO urges agents to follow the rules: “Don’t add addendums. Don’t add anything that will be visible to all users of the multiple listing service or you’ll be fined.”
• CRMLS General Counsel Edward Zorn told Inman he believes most MLSs are ready for August 17 and have communicated with members about the changes: “MLS have taken action and done what they need to do to prepare for the changes. .
• Brian DonnellanCEO Bright MLSThe nation’s second-largest multiple listing service spoke with Inman on Tuesday, the day before Bright was set to implement the changes, and said his organization would take an “education first” approach to addressing potential violations.
• “We’re going to do our best to make sure people are educated before we fine people,” Donnellan said. “Ultimately, I think we’re going to have to fine people because it’s such a big problem. Everyone is looking at it now.
• Donnellan said he expects to hear mixed emotions about the changes once they are implemented and Bright members interact with the updated system. “These guys eat whatever they hunt. They probably have more stress than other people. I can see where their stress comes from.

Additional resources:

Agents scrambled – but problems (and frustration) continued until the 11th hour

Multiple listing servicers may have been scrambling to roll out the changes, but some in the brokerage community — echoing recent comments from Inman Connect Las Vegas — told Inman the process is nothing short of confusing.

• Courtney Poulos of ACME Real Estate The Los Angeles-based firm has long specialized in exclusive buyer agency agreements, but sometimes mixed messages have emerged. She was particularly critical of the lack of “any real opening day agreement” among other things.
• “This was a very confusing deployment,” Poulos said. “I think [NAR] The proposed settlement changes were announced before they had laid out plans to roll out procedural elements. our association [the California Association of Realtors] There were educational workshops on the new forms, and then they had to revise those forms, and then there was a new workshop that said, “Forget everything we just told you, we revised the forms.” So the rollout was very sloppy. . This caused a lot of confusion.
• In Orlando, Florida, Veronica Figueroa and fig team Already processing rule changes as local multiple listing service – Stellar MLS – These changes will take effect on August 6th.
• “Honestly, I don’t think we can say we’re fully prepared that there won’t be any breakage or friction,” Figueroa told Inman. “We’ve seen fines in Major League Soccer, but there’s been a lack of transparency about how those fines are being used.”
• at the same time, Andrea Geller of Berkshire Hathaway Chicago HomeServices Tell Inman she “did the best I could.” But others, she added, are not. “I worry about the other agents around me.”

Additional resources:

What will happen now?

Despite the deadline, many questions remain unanswered. Do sellers typically continue to offer commissions? Will the buyer pay out of pocket? Will the Justice Department push for bigger changes? Will commissions drop significantly? No one knows that yet, but these are questions to watch in the coming months.

The future of NAR is also an open question. The settlement comes after a tumultuous period for the organization, with scandals and executive turnover dominating the 2023 news cycle. NAR severed ties and the organization still lacks a permanent chief executive. The next few months, then, will be a acid test for an entity that has defined real estate for decades.

Agents and the organizations that serve them must also exercise caution to avoid violating the rules in the near future:

• customer relationship management systemFor example, it told its members they would face a $2,500 fine if they included language about indemnification in their MLS.
• Michael Kagemakthe lead plaintiff lawyer in the case Seats | BurnettInman told Inman in an exclusive interview this week that he will be watching developments closely: “If anyone thinks they can avoid this settlement and the application of the law by creating some new form or hiding this collaboration. New website, they Wrong. If we sense someone or a company is doing this as a way to resolve this issue, we plan to take legal action quickly.
• Therefore, agents who want to survive this period of change need what Figueroa calls a “mindset change.” “I think what’s important right now is your consultation, your ability and your belief in being able to really articulate how you’re going to get help. [consumers] Get the job done by giving them the best price, the best negotiation, and you’re an expert who has proven results.

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