Veterans Affairs Signals Temporary Suspension of Buyer Agent Payment Ban
The Department of Veterans Affairs plans to temporarily lift its ban on buyers directly paying for professional real estate representation until the agency deems it necessary to engage in a formal rulemaking process, a VA official said Tuesday at a Mortgage Bankers Association conference in New York.
Although not an official announcement, the comments from VA Deputy Director of Policy Michelle Corridon were met with relief from the real estate industry, as the VA’s home loan guaranty is the only loan program with this explicit prohibition. Veteran buyers have limited options in situations where the listing broker makes no offer of compensation to the buyer broker, potentially leaving veterans without professional representation or forcing them to switch to less favorable loan products. Click here to read more.
Rule Changes go into effect August 17, 2024
Under the NAR Settlement Agreement, practice changes result in revisions to the MLS policy handbook which are summarized below. The revised policies will go into effect on August 17, 2024.
Our settlement requires NAR to implement the practice changes no later than the date of class notice. Through the preliminary settlement approval process, we now know the earliest date of class notice is August 17, 2024. We are announcing these important changes now to ensure NAR members and MLSs have ample time to prepare.
MLSs that have opted into the settlement agreement have until September 16, 2024 to implement the necessary policy changes and to be considered released parties, as provided in the relevant appendices they executed. However, NAR’s accelerated rule change process gives MLSs three months to adapt. In accordance with mandatory NAR policy, REALTOR® MLSs must implement the practice changes by August 17, 2024. NAR recommends all opting-in MLSs implement the practice changes by this date.
Over the coming days, we will discuss these changes in more detail and look for your questions and feedback. In the interim, our FAQ has been updated to reflect the effective date and provide additional detail on implementation. We are committed to working together to navigate these adjustments and providing as much guidance to our members as possible. As further details emerge, additional materials will be shared and posted to facts.realtor.
Preliminary Settlement Agreement Approved
- Individual NAR members and their brokerages with 2022 total transaction volume for residential home sales below $2 billion do not need to take any action to be covered by the settlement.
- The following entities that choose to be covered by the settlement must execute the relevant affidavit by June 18, 2024:
- REALTOR® MLSs – which are MLSs wholly owned by REALTOR® associations.
- Brokerages with 2022 total transaction volume for residential home sales in excess of $2 billion
- Non-REALTOR® MLSs – which are MLSs that are not wholly owned by REALTOR® associations
The settlement is still subject to final court approval, and plaintiffs have requested a hearing on final approval of the settlement to be held on November 26, 2024. For a more comprehensive view of what’s ahead, please see an estimated timeline here.
Does this mean that the settlement is now fully approved?
- No. Today’s order granted preliminary approval of the settlement.
The settlement is still subject to final court approval, and we expect a motion for final approval to be filed at the end of this year.
What does preliminary approval mean for pending or potential copycat cases?
- Class members are now temporarily enjoined from filing, commencing, prosecuting, intervening in, or pursuing as a plaintiff or class member any claims against NAR or any released party. This prohibition applies to any and all claims, regardless of the cause of action, arising from or relating to conduct that was alleged or could have been alleged in the Sitzer-Burnett and the other settled Actions based on any or all of the same factual predicates for the claims alleged in those Actions.
- NAR will move to have litigation about the MLS cooperative compensation Model Rule stayed, or paused, as to NAR pending the settlement approval process.
Do individual NAR members need to take any action in order be covered by the settlement agreement?
- No. If you are an NAR member as of the date of the class notice, you are covered by the settlement unless:
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- You are an employee of: At World Properties, LLC; Douglas Elliman, Inc.; Douglas Elliman Realty, LLC; eXp Realty, LLC; eXp World Holdings, Inc.; Hanna Holdings, Inc.; HomeSmart International, LLC; Howard Hanna Real Estate Services; Realty ONE Group, Inc.; Redfin Corporation; United Real Estate; or Weichert, Realtors® OR
- You are associated with HomeServices of America or one of its affiliates.
- The date of the class notice has not been set, but it will be sent no earlier than August 17, 2024.
Which entities need to take action in order to be covered by the settlement agreement?
- All REALTOR® MLSs, brokerages with 2022 total transaction volume for residential home sales in excess of $2 billion, and non-REALTOR® MLSs who want to be covered by the settlement must take action. The deadline to execute the relevant appendices to be released under the settlement is June 18, 2024.
- If you are not part of the above groups, then you do not need to take action based on today’s order.
What happens next?
- The settlement is subject to final court approval, and we expect a motion for final approval of the settlement to be filed at the end of this year.
- The practice changes set forth in the settlement agreement are slated to take effect in late July of this year, and class notice will take place no earlier than August 17, 2024.