North Cincy News

Recent discussions about the National Association of REALTORS (NAR) settlement agreement have raised questions regarding its impact on commercial real estate transactions. However, it is important to clarify that the agreement primarily concerns residential real estate.

Johnny Noon, Director of Engagement for Commercial Real Estate at NAR, assures that "most commercial transactions will remain unaffected." The focus remains on residential dealings, as highlighted in several lawsuits like the Sitzer-Burnett case. These cases concentrate on residential transactions and do not extend to most commercial dealings.

In various markets, commercial listings are typically found in commercial information exchanges rather than multiple listing services (MLSs), which usually do not include an offer of compensation. Under the settlement terms, offers of compensation on MLSs are prohibited, and participants working with buyers must enter written agreements with them. This change is expected to take effect by late July.

For properties listed on MLSs, consumers can still negotiate offers of compensation off-MLS through consultation with real estate professionals. Additionally, sellers may provide buyer concessions such as closing costs or tenant improvement allowances on MLSs without conditions related to buyer broker usage.

Compensation for buyer/tenant brokers can vary based on negotiations between brokers and consumers. It remains negotiable and should be discussed between agents and their clients.

Regarding whether REALTORS involved in commercial real estate are covered by the agreement: "The settlement does not distinguish between REALTORS who deal in commercial real estate from those who work in residential real estate." Coverage applies unless individuals are employees or contractors associated with specific companies listed by NAR.

Commercial practitioners should note that despite changes focusing on residential transactions, most aspects of their business will stay unchanged due to different market structures like CIEs over MLSs.

For further details about NAR's commercial program or the settlement agreement itself, individuals are encouraged to visit NAR’s websites or contact Johnny Noon’s team directly.