Northwest MLS opts out of NAR’s commissions lawsuit settlement

by Patrick Regan

Northwest MLS will not join the commissions lawsuit settlement reached by the National Association of REALTORS® (NAR), noting that most of the provisions in the deal are redundant with current NWMLS rules.

NAR announced a $418 million legal settlement in March in the highly publicized Sitzer-Burnett lawsuit. As part of the settlement, NAR said it would remove commissions from the MLS and require buyer broker agreements. Several Realtor associations opted in to the settlement, and major brokerages across the country reached their own settlements in the wake of NAR’s decision.

In a news release this week, NWMLS noted that the association has been a leader in commission transparency, eliminating the requirement that a seller offer compensation to the buyer’s broker in 2019. In 2022, NWMLS de-coupled broker commissions, and it required that compensation offered by the seller to the buyer broker be “prominently stated on the first page of the purchase and sale agreement, with an opportunity for that compensation to be negotiated by the buyer and the buyer’s broker.”

NWMLS also championed Washington’s Agency Law, which took effect Jan. 1 and required brokers to enter into written agreements with buyers and sellers. Previously, those agreements were required only for sellers. 

“NAR’s proposed settlement agreement largely duplicates the rules and practices in place in NWMLS’ service area for several years — with one notable exception: The settlement agreement eliminates compensation transparency for buyers and restrains sellers’ choice by prohibiting sellers from making offers of compensation through the MLS,” NWMLS said in its news release. “Instead, the settlement agreement allows for offers of compensation ‘off MLS,’ where that information is hard to find and not available to all buyers and brokers. That change is a step in the wrong direction and is detrimental to consumers and brokers alike.”

NWMLS said NAR’s removal of compensation transparency from the MLS “pushes consumers and brokers to make secret deals off MLS, inviting deceptive practices, discrimination and unfair housing. Depriving buyers of information about the transaction risks harming buyers, especially those buyers who are already disadvantaged, including first-time homebuyers and members of protected classes. Prohibiting offers of compensation in the MLS also unnecessarily restrains the seller’s choice and absolute right to offer compensation to a brokerage firm representing the buyer.”  

NWMLS plans to revise its forms and listing process in mid-August to make it clear that sellers have the option to offer buyer broker compensation or have the buyer include the compensation in their offer and negotiate the amount of compensation payable to the buyer broker. These options have always been in place and will continue.

“NWMLS’ procedures are facilitated by progressive rules and forms and give consumers more choices, not fewer, and more information, not less,” the association said. “A seller may choose to offer no compensation, offer a specific amount of compensation or ask that the buyer request compensation for the buyer broker in the buyer’s offer. These options all exist in NWMLS’ system – an open, fair, and transparent marketplace for consumers and brokers.”

NWMLS has more than 30,000 members and operates in 26 counties throughout Washington.

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