KCRAR & Heartland MLS Changes for NAR Settlement Compliance

August 5: Two new amendment forms will be released.   

August 14: Other updated forms will be released on KCRAR.com. 

August 14: Compensation fields will be removed from Heartland MLS.

Per the NAR settlement agreement, effective Aug. 14, 2024, compensation fields will no longer be available in the HMLS Matrix system. After Aug. 14, agents will be prohibited from marketing offers of compensation anywhere on the MLS. 

Section 5 of the Heartland MLS Rules and Regulations that previously referenced unilateral offers of compensation on the MLS have been removed to align with the removal of the compensation fields. 

You could be fined up to $500 if you’re found to have communicated compensation or commission to other agents anywhere on the MLS. This mirrors the same penalty structure as the current rule for listing agreements. You can find the specifics in section 7.3 of the HMLS rules and regs. 

You will need to print a copy of the listing from the MLS system. This will serve as verification in writing of the offer of compensation from the seller before the field is removed from the system. 

You will need them to sign a Listing Contract Amendment ahead of the removal of these fields on Aug. 14. This includes active, pre mls, temporarily off-market and withdrawn listings. 

You and your buyer will need to sign the Settlement Buyer Agency Contract Amendment. This new and temporary amendment is needed to indicate what broker compensation will be, to align with settlement requirements. 

• The “working with” language is intended to distinguish MLS Participants who provide brokerage services to a buyer—such as identifying potential properties, arranging for the buyer to tour a property, performing or facilitating negotiations on behalf of the buyer, presenting offers by the buyer, or other services for the buyer —from MLS Participants who simply market their services or just talk to a buyer—like at an open house or by providing an unrepresented buyer access to a house they have listed. 
• If the MLS Participant is working only as an agent or subagent of the seller, then the participant is not “working with the buyer.” In that scenario, an agreement is not required because the participant is performing work for the seller and not the buyer.
• Authorized dual agents, on the other hand, work with the buyer (and the seller).
• A written buyer agreement is required prior to a buyer “touring a home.” An MLS Participant “working with” a buyer can enter into the written buyer agreement at any point but must do so by no later than prior to the buyer “touring a home,” unless state law requires a written buyer agreement earlier in time (See FAQ “What is considered “touring” a home?”  (Source: Facts.Realtor)

Beginning Aug. 14, all KCRAR and Heartland MLS agents must have a written buyer agreement before working with buyers or touring a home with a buyer. Although this becomes a requirement on Aug. 14, KCRAR encourages all members to begin this best practice immediately. Heartland MLS Rules and Regulations have been revised to reflect this new requirement.  

• Written buyer agreements are required before a buyer tours a home.
• Touring a home means when the buyer and/or the MLS Participant, or other agent, at the direction of the MLS Participant working with the buyer, enter the house. This includes when the MLS Participant or other agent, at the direction of the MLS Participant, working with the buyer enters the home to provide a live, virtual tour to a buyer not physically present.
• A “home” means a residential property consisting of not less than one nor more than four residential dwelling units. (Source: Facts.Realtor)

If you’re found to be in violation of the new requirement to have a written buyer agreement, you could be fined up to $500, depending on the quantity of violations. This mirrors the same penalty structure as the current rule for listing agreements. You can find the specifics in section 7.3 of the HMLS rules and regs. 

New Forms 

• Limited Service/Transaction Broker Agreement 
• Retainer/Additional Compensation Addendum  
• NAR Settlement Amendment to Buyer’s Agency  
• NAR Settlement Disclosure for Sellers  

 Updated Forms 

• Residential Real Estate Contract  
• Real Estate Sale Contract – New Homes  
• Real Estate Sale Contract – Land  
• Counter Offer Addendum  
• Exclusive Buyer Agency Contract  
• Exclusive Right to Sell Contract 
• Non-Exclusive Buyer Agency Contract 
• Exclusive Right to Sell  
• Exclusive Agency Listing Contract 
• Exclusive Right to Sell Transaction Broker  
• Sellers Estimated Proceeds Worksheet 

On the KCRAR Exclusive Right to Sell contract, certain references to compensation were removed. Language was also added to state that compensation is not set by law and is negotiable. 

In the Compensation paragraph, compensation pertains only to what the listing broker will receive. Disclosure is made to the Seller that a buyer may ask, but the seller is not required to compensate the broker assisting the buyer, and compensation for the broker assisting the buyer will now be addressed and negotiated in the purchase agreement, based on the negotiations of the parties. The Seller decides their willingness to cover the fees of the broker assisting buyer and sets criteria for disclosure of that willingness.  

The Protection Period paragraph was not changed but was named. The Title Insurance paragraph was not changed but was moved below agency and compensation. The same changes were made to the Exclusive Agency and the ERTS-Transaction Broker forms. 

The Seller’s Estimated proceeds form was also updated to make a distinct line item for compensation for the broker assisting the buyer, so you will have the tools to show a seller what it looks like if a buyer asks the seller to compensate their broker. 

The Listing Contract Amendment is a new form added to the KCRAR forms library and is for temporary use during this transitionary period. Current language stipulates that compensation will be a total amount with a shared percentage between brokers, so listing agency contracts that are active but not under contract by Aug. 14 when compensation fields are removed from the MLS will need to be amended. This impacts active, pre MLS, temporarily off-market, and withdrawn listings

Effective Aug. 14, 2024, all agents must have a written buyer agreement before working with a buyer or touring a home. There are now three types of agency relationships: exclusive buyer agency, non-exclusive buyer agency and limited services or transaction broker agreements. 

The Exclusive Buyer’s Agency Contract and Non-Exclusive Buyer’s Agency Contract have both been revised, and the revised versions will be replaced in the KCRAR forms library on Aug. 14. 

The limited services transaction broker contract is a new form added to the KCRAR forms library. The Limited Services Agreement provides for a third option, whereby; buyer understands the limited services arrangement between buyer and broker, but compensation is clearly defined, as it is in the Exclusive & Non-Exclusive buyer agency agreements. This form is for situations when an agent is going to charge a retainer fee or have a method of compensation that is over and above what is in the written buyer agreement. Please note, if this is allowed in your brokerage, use of this form requires broker approval and signature, as all monies must be paid to the brokerage. 

The Buyer Agency Contract Amendment is another new form and is for temporary use during this transition period. Previous buyer agency contracts include language referencing compensation listed in MLS, which conflicts with the NAR settlement requirements. Buyer’s agency contracts that are active but not under contract by Aug. 14 when shared compensation is removed from the MLS will need to be amended. 

With the removal of compensation fields from the MLS, buyers have the option to ask that the broker assisting them be paid by the seller. Third party beneficiary language has been added due to the new compensation provision to account for the fact that the broker assisting the buyer isn’t a party to the contract but has rights to a provision in the contract. Seller’s compensation to the Broker assisting Buyer has been added to the additional Seller Expenses paragraph. Language has been added to state that compensation is not set by law and is negotiable and that brokers are acting pursuant to separate written agreements. The Counter Offer Addendum was also updated to include compensation to broker assisting buyer. 

The settlement and the practice changes it requires are focused on residential transactions, not commercial transactions, or leases.

Any data fields, data feeds, direct products/services or 3^rd Party Products/Services provided by or connected to HMLS/KCRAR cannot be used to communicate compensation. This includes but is not limited to:  fields within HMLS Matrix, BrokerBay, Supra Lockbox products, Dotloop (EZ Share Link), Supplements, Private Remarks, Reverse Prospect emails via the MLS, KCRAR/Heartland MLS managed social media.

Yes, MLS Participants may augment MLS data or data feeds with offers of compensation to buyer brokers or other buyer representatives for only listings of their own brokerage. (Source: Facts.Realtor)

Agents can include a link to a brokerage website/webpage, however, that link cannot direct to a page that displays an offer of compensation. 

• Offers of compensation may continue to be made off MLSs, in consultation between the real estate professional and the seller. With respect to offers of compensation, REALTORS® must continue to be guided by their ethical duties under the REALTOR® Code of Ethics, including that:
• REALTORS® must always:
  • Article 1 – Protect and promote their client’s interests
  • Article 3 – Ascertain compensation
  • Article 9 – Assure all real estate transaction agreements are in writing in clear and understandable language
  • Article 10 – provide equal professional services and comply with fair housing laws
  • Article 12 – Be honest and truthful in communications
• As a reminder, pursuant to both Article 17 of the REALTOR® Code of Ethics and MLS policy, members are required to mediate and arbitrate contractual and compensation disputes.
• These ethical rules continue to apply after, and are not changed by, the MLS practice changes required by the proposed class action settlement. (Source: Facts.Realtor)

No. In this case, since the MLS Participant is only working for the seller, and not the buyer, the MLS Participant does not need to enter into a written agreement with the buyer. (Source: Facts.Realtor)