Ever since the National Association of REALTORS® (NAR) agreed to settle the Sitzer-Burnett lawsuit in March 2024, real estate agents nationwide have felt uncertainty about how it will impact the industry. New York City agents in particular, most of whom aren’t members of NAR, might be under the impression that the agreement doesn’t affect them. But with the Real Estate Board of New York (REBNY) and several national brokerages that operate in NYC opting into the settlement, this is no longer the case.
StreetEasy® is here to support NYC agents like you in these moments of change, helping you adapt your business to succeed. Here’s what we know about the NAR settlement’s implications for the NYC market.
Last updated: 12/18/2024
StreetEasy is closely monitoring the NAR settlement and its impact on the NYC market. We’ll be updating this article as more information becomes available.
For a list of known implications for the national market, see 9 Important Agent Takeaways From the NAR Lawsuit Settlement from Zillow.
NAR’s policy changes went into effect August 17, 2024
Following the announcement of the settlement in March, NAR established a set of policy changes applying to any REALTOR® Multiple Listing Service (MLS) and its members or participants that went into effect August 17, 2024.
The settlement also requires NAR to develop educational materials that are consistent with the policy changes, and eliminate any previous materials that are contrary to them. To stay up-to-date, see their NAR Settlement: Get the Facts hub containing the latest materials, resources, and news pertaining to the settlement agreement.
MLSs and non-REALTOR® MLSs opted into the settlement can no longer display commission offers
On both REALTOR® and non-REALTOR® MLSs that have opted into the settlement, listing agents and sellers are now prohibited from displaying offers of compensation to buyer’s agents. Note that with REBNY joining the settlement, its Residential Listing Service (RLS) is considered a non-REALTOR® MLS, meaning this policy change applies to the RLS.
In practice, this means agents won’t be able to see or communicate offers of commission on MLSs covered under the settlement. However, as NAR explained in March, buyer’s agent compensation offers can be an option consumers pursue outside the MLS. For more on compensation offer policies per the NAR settlement, see their FAQ.
For REBNY members, offers of compensation to the buyer’s agent must originate from the seller
Independent of the NAR settlement, REBNY introduced five revisions to its Universal Co-Brokerage Agreement (UCBA) effective as of January 1, 2024. One of these revisions, that of decoupling commissions, directly impacts REBNY-member NYC agents. The revision requires offers of compensation to the buyer’s agent to originate from the seller, not the listing agent, even if it’s on the seller’s behalf:
To promote transparency and consumer confidence in the residential marketplace, the UCBA will now require offers of compensation to the buyside broker to originate from the Seller/Owner. Listing Brokers will no longer be permitted to make the offer of compensation to the buyside broker – even if it is on the Seller’s/Owner’s behalf.
Furthermore, buyer’s agents must be compensated by the seller (not the listing agent):
Assuming there is an offer of compensation from the seller and the buyer’s broker has accepted the offer, the buyer’s broker will be directly compensated by the seller or owner of the exclusive property, which should occur at the closing as is customary in the New York City area.
For more information, see REBNY’s FAQ on decoupling commissions.
Many agents will be required to sign a written agreement with buyers before touring homes
A condition of the NAR settlement requires “MLS Participants working with a buyer to enter into a written agreement with the buyer prior to touring a home.” This also applies to many NYC agents, including REBNY member agents starting January 13, 2025. Written agreements are an opportunity to add transparency, promote open conversation, and set proper expectations with your buyer clients.
To help agents adhere to the new industry standard — without having a potential buyer sign an exclusive agreement before a tour — StreetEasy created a short-term, non-exclusive Touring Agreement. Meant as an introductory, consumer-friendly agreement and drafted with New York State compliance in mind, it sets expectations for the buyer concerning representation, and helps lay the foundation to discuss compensation and exclusivity in a subsequent agreement when you and the buyer are ready. For more information, see StreetEasy’s Touring Agreement: What Agents Need to Know.
Some NYC brokerages have introduced their own brokerage-specific agreements for use ahead of a tour, separate from StreetEasy’s Touring Agreement. Buyer’s agents are free to use either agreement.
There is rising consumer awareness about commissions
Despite the media buzz around the settlement, in terms of policy, much of the settlement agreement isn’t anything new. For example, commissions have always been negotiable, and agents were already prohibited from filtering listings by compensation offer. That said, many consumers have been paying attention to the news as well, and are increasingly aware of the factors that affect them — like their ability to negotiate commissions.
Agents nationwide, including in NYC, can reasonably expect this rise in awareness among buyers and sellers. Accordingly, agents should approach the first conversation with a buyer knowing how to show their value and turn a prospect into a loyal client.
For more on how to adapt and thrive amid this shift, visit our Latest Industry Standards resource hub for agents. You’ll find tips for communicating your value, discussing commissions, and introducing a buyer’s agreement, as well as resources to share with your buyer clients — like the StreetEasy Home School video below.
