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NAR agreed to make two practice changes effective August 17, 2024. The following addresses the real estate practice changes required by the proposed settlement agreement.

What are the practice changes under the NAR proposed settlement agreement? 

The Multiple Listing Service (MLS) will no longer include offers of compensation. Most Wisconsin MLSs will remove the compensation field around mid-August though some may make the change earlier. Therefore, listing firms will no longer be able to offer compensation to cooperating firms via the MLS.

Firms working with buyers need a written buyer agreement before touring a home with a buyer.

Can a listing firm still offer compensation to cooperating firms?

A listing firm can still offer compensation to cooperating firms but cannot use the MLS to do so. A firm can make an offer of compensation on its website, on signs, with fliers, social media posts, text messages, emails, telephone or other non-MLS communications.

May MLS participants or subscribers use showing platforms to offer compensation?

No. Compensation may not be offered on the MLS or any other showing platforms, associated documents or other shared tools for REALTORS^® created by MLS participants and REALTOR^®-owned MLSs. Use of MLS data or data feeds to directly or indirectly establish or maintain a platform of offers of compensation from multiple firms to buyer’s firms or other buyer representatives is prohibited.

Can firms post the offer of compensation in the broker remarks on the MLS?

No. Firms should not post the offer of compensation on the MLS at all.

Can firms enter into compensation agreements with other firms?

Firms can have compensation agreements with other firms, but they will be on a transaction-by-transaction basis. The terms of the NAR proposed settlement agreement require a listing firm to first disclose to a seller what the firm proposes to offer to cooperating firms, and the seller must approve that amount and offer prior to the firm paying or entering into any agreement to pay a cooperating firm.

The firms may use the WRA-CA Compensation Agreement form for this purpose. This form has been revised due to the settlement agreement.

May firms enter into standing policy letters or blanket compensation agreements for firm-to-firm compensation?

No. As part of the proposed settlement terms, a listing firm must conspicuously disclose to sellers, and obtain seller approval for, any payment or offer of payment that the listing firm or seller will make to another firm acting for buyers.

This disclosure and seller approval must be in writing and must be provided in advance of any payment or agreement to pay to another firm acting for buyers and must specify the amount or rate of any such payment.

What happens to existing policy letters or blanket compensation agreements between firms?

As of August 17, 2024, they will be in violation of the terms of the NAR proposed settlement. Any firm with policy letters or standing compensation agreements should inform affected individuals that these are no longer enforceable.

Can a firm advertise seller concessions on the MLS?

If a seller is offering concessions, the firm can advertise that on the MLS if that MLS’ rules permit advertising seller concessions. Concessions advertised in the MLS cannot be conditioned on payment to the buyer’s firm. A buyer can use the buyer’s offer to purchase to ask the seller to pay the buyer’s firm’s fee.

Who needs to enter into a written buyer agreement?

MLS participants working with buyers must enter into written agreements with buyers before touring a home.

If the firm is the listing firm, no additional agreement is needed because the firm is working with the seller, not the buyer.

If the firm has a buyer agency agreement with the buyer, the buyer agency agreement works as the written agreement before touring, and no additional agreement is needed.

*As provided in NAR's FAQs.

Under Wisconsin law, there are three different ways to have a relationship with a buyer. Each way varies by the level of service. 

If the firm gives a Disclosure to Customers form to the buyer before looking at any properties, the buyer is a customer, and the firm is a subagent of the listing firm. No additional agreement is needed. The WRA-BDCU Disclosure to Customers form was updated to reflect the spirit of the settlement agreement.

If the firm operates in pre-agency where the buyer is not yet a client or a customer, the terms of the NAR proposed settlement agreement require the firm and the buyer to have a written agreement before touring a home.

If the buyer is looking at non-residential property, no written agreement is needed.

What must the written buyer agreement include?

The written agreement must include:

• A specific and conspicuous disclosure of the amount or rate of compensation the real estate firm will receive or how this amount will be determined.
  The compensation amount must be objectively ascertainable, for example, a specific percentage of purchase price, a flat dollar amount or an hourly rate. Compensation may not be open-ended, for example, “buyer firm compensation shall be whatever amount the seller is offering to the buyer.
• A term that prohibits firms from receiving compensation for brokerage services from any source that exceeds the amount or rate agreed to in the agreement with the buyer.
• A conspicuous statement that firm fees and commissions are not set by law and are fully negotiable.

The firms may use the WRA-PASA Pre-Agency Showing Agreement for this purpose. 

Is a written buyer agreement needed for an open house?

No. An open house is not considered “touring a home,” so an agent hosting an open house will not need to have written agreements with the buyers attending the open house.

Will current listings, buyer agency agreements or tenant representation agreements need to be amended?

For the most part, existing listing contracts and buyer agency and tenant representation agreements will not need to be amended. The WRA created a disclosure form, WRA-CD, that can be provided to clients with existing listing contracts and buyer agency and tenant representation agreements to incorporate disclosure language required by the settlement. Firms may use the WRA-CD Compensation Disclosure for Wisconsin Agency Agreements form for this purpose.

If an existing listing required a firm to offer compensation in the MLS, then the listing would need to be amended with a WB-42 Amendment to Listing Contract. The preprinted terms of the WB listings do not require a firm to make an offer of compensation on the MLS, so the majority of listings will not need to be amended.

If an existing buyer agency agreement states the buyer’s firm’s compensation will be “whatever is offered by the seller or listing firm” or “whatever is offered in the MLS” or in some other language that is open ended, the agreement will need to be amended to state the commission as an amount that is objectively ascertainable. The WB-47 Amendment to Buyer Agency or Tenant Representation Agreement can be used if an amendment is necessary.

Do I still need to use the WRA-ADDC Addendum C – Commission Transparency?

No. The WRA-ADDC Addendum C — Commission Transparency was created in fall 2023 to create greater transparency with consumers about commission charges. The revisions to the listing contracts and buyer agency and tenant representation agreements ensure the Addendum C — Commission Transparency is no longer necessary. 

Will the WB forms be updated to comply with the NAR proposed settlement agreement?

All listing contracts, all buyer agency and tenant representation agreements, all offers to purchase, and the option to purchase have been revised with an optional use date of July 1, 2024, and a mandatory use date of August 15, 2024. The additional disclosure documents are not necessary when using the updated WB forms.

• WRA antitrust resources webpage
• WRA forms are available in Transactions (zipForm Edition) and the WRA Forms Library. These services are included with WRA membership.
• NAR’s “The Facts for REALTORS^®” webpage