After announcing a $418 million settlement in March, the National Association of Realtors is implementing policy changes for Multiple Listing Service platforms across the country later this year.

The changes are expected to take effect Aug. 17 and could change how real estate brokers are paid during a transaction process. Thomas Mouton, chair of the Houston Association of Realtors, which is affiliated with the NAR, explained how the settlement and policy changes will affect licensed brokers, buyers and sellers in the Houston area.

The background

The MLS is an online platform where licensed real estate professionals can list homes for sale or view homes that are already listed.

“[The MLS] gives you all the details of the home—what year it was built, square footage, how many rooms, room sizes,” Mouton said.



Listing a property on the MLS platform gives it the best exposure, which typically leads to homes selling at higher prices. The MLS is a paid subscription for real estate agents, Mouton said.

“It’s the truest marketplace that individuals can go to,” he said.

More than 800 MLS platforms are managed by realtor associations across the country, including the HAR. The platforms are private databases that are created, maintained and paid for by real estate professionals to help clients, according to the NAR’s website.

For realtor associations affiliated with the NAR, the MLS policy changes must be implemented in August, according to a May 3 news release by the NAR.
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What’s changing?

The following MLS policy changes are slated to go into effect:

  • Sellers can’t post offers of compensation to buyer brokers on the MLS.
  • MLS participants can’t filter or restrict MLS listings to clients based on the level of compensation offered to the broker.
  • Compensation disclosure to sellers or buyers is required.
  • MLS users must enter an agreement with buyers before home tours.

Real estate brokers will still be paid for their services, but the way they’re paid could change in August. Compensation agreements will be reached through negotiation and consultation off of the MLS, according to a March 15 news release by the NAR.

“Houston is going to be affected like everyone else because it’s a national settlement,” Mouton said. “We’re no different than any other state.”

Instead of a compensation offer being listed in the MLS, buyers’ agents now have to reach out to the seller’s agent through the MLS to inquire about compensation, Mouton said. Buyers will have to sign a compensation agreement before touring any homes identified through the MLS.



“Typically when an agent searches for a home for their client, [the MLS] is going to tell you what the listing agent is actually offering for compensation,” Mouton said. “Now, that will not be displayed anywhere on the site, so that’s the biggest change from an MLS perspective.”

The changes present a chance for realtors to be paid differently than they are now. Instead of getting a commission rate for selling a home, they could be paid a fee for services and time offered to their clients, according to the NAR’s website.

What they're saying

When it comes to the upcoming changes, 67% of the general public are in support, according to a June 3 report from real estate data company Clever. Reasons included:

  • Reducing the financial burden on sellers
  • Creating a more level playing field between buyers and sellers
  • Improving trust in the real estate industry
  • Giving consumers more flexibility in choosing real estate services

According to the report, 70% of real estate agents oppose the upcoming changes. Reasons include:

  • Burdening first-time homebuyers
  • Discouraging first-time buyers from entering the market
  • Creating uncertainty in the market
  • Disrupting the traditional business model

What’s next?



After the policy changes take effect, a final approval hearing for the settlement is scheduled for later in November.

  • March 15: Settlement agreement signed
  • April 24: Preliminary approval of settlement review granted by the court
  • Aug. 17: Practice changes take effect, earliest day for class action lawsuit notifications to be issued to those impacted
  • Nov. 26: Final approval hearing for the settlement

For more information about the settlement and how it may affect real estate professionals, the NAR lists information and a timeline about the upcoming policy changes on its website.