Correcting the Record: NAR Does Not Set Commissions

By klrw460 March 19, 2024

The National Association of REALTORS® (NAR) maintains that it does not dictate commission rates, which are open to negotiation. Litigation has focused on a rule necessitating listing brokers to communicate compensation offers, which could be any amount, even zero. The MLS Handbook and NAR policy specifically prohibit MLSs, associations, and brokers from setting or suggesting compensation amounts. The relevant rule, the MLS Antitrust Compliance Policy, and a notice in the NAR’s MLS Handbook underscore that commissions are not fixed by the NAR but are a matter of negotiation between the broker and their client.

Furthermore, in response to litigation, the NAR has agreed to introduce a new MLS rule that bans offers of broker compensation on the MLS, reinforcing the principle that commissions are negotiable. According to the Handbook on Multiple Listing Policy, when properties are listed on the MLS, listing brokers must specify the compensation offered to other MLS participants, as this ensures transparency about potential earnings before efforts to sell are initiated. The listing broker has the autonomy to decide the compensation for different roles, whether equal or varied.

The Handbook also emphasizes the purpose of multiple listing services (MLS) as facilitating the sharing of listing information among participants for the benefit of buyers and sellers. It explicitly states that REALTOR® boards, associations, and their MLSs are prohibited from influencing, controlling, or suggesting rates for real estate brokerage services or the compensation offered by listing brokers to cooperating brokers. This stance supports an environment where the specifics of broker compensation are negotiated independently of any overarching regulatory body or agreement, maintaining a competitive and fair market dynamic.

For the full details and insights, please refer to the original press release at the following link: