The NAR Settlement and Its Effect on Washington Real Estate

Expect more transparency and fairness in our real estate transactions.

Will the recent NAR settlement affect your buying and selling plans in Washington? The new real estate took effect on August 17, which significantly changed how we buy or sell homes. I’ll share a brief overview of the NAR lawsuit, some key aspects of the settlement, and how it impacts our day-to-day real estate transactions whenever we buy and sell in Washington.

What is the NAR settlement? It is a major legal agreement designed to address long-standing issues on real estate broker commissions and transparency. The settlement started from a class-action lawsuit alleging that certain NAR rules limited competition and transparency in real estate transactions. Here are the four key aspects of these changes:

1. Enhanced transparency.

Agents are now required to be more upfront about their services and fees.

2. Negotiation of commissions.

Commissions are negotiable, which challenges the notion of fixed fees.

“Washington’s real estate market is already well-prepared.”

3. Changes to MLS practices.

Restriction on displaying buyer-broker compensation on the MLS switching focus on client needs rather than compensation.

4. Legal and financial resolution.

A settlement of $418 million was paid to resolve claims and fund compliance, affecting over a million NAR members.

In addition, here’s what you need to know about how these changes will impact our transactions as buyers or sellers in Washington State.

1. Alignment with existing practices.

Washington’s Northwest Multiple Listing Service (NWMLS) already embraces many principles of the settlement, such as transparency in commission publication.

2. Form updates.

We already updated our forms in the NWMLS to align with both the NAR settlement and Washington’s state regulations. This ensures a smooth transition for agents and clients.

3. Leadership in transparency.

Washington believes in transparent real estate practices. Since October 2019, NWMLS has allowed the independent publication of buyer agent commissions. Additionally, recent updates to state laws require signed Buyer Representation Agreements, enhancing transparency and informed consent.

While the NAR settlement introduces a new national standard, Washington’s real estate market is already well-prepared. Our state’s existing practices and proactive measures ensure that both buyers and sellers will benefit from continued transparency and fairness. For more insights into real estate trends and updates, don’t hesitate to reach out to us at (425) 270-7692 or neelam@propertyatseattle.com.