The Facts for REALTORS®
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Frequently Asked Questions
The practice changes set forth in the settlement agreement will take effect August 17, 2024
Stay tuned to NAR and SCR communications on this issue and review NAR and SCR posted content on this issue.
While there likely may be some future procedural changes, South Carolina is already one of a small number of states requiring proper written agency and non-agency (e.g., transaction brokerage) agreements so operational changes may be minimal.
Currently, the South Carolina laws require proper written agreements that state important issues such as agency, non-agency transaction brokerage, compensation, duties, etc.
Due to decades of proactive, consumer-friendly efforts by SC REALTORS®, very little will change for South Carolina homebuyers, sellers, and REALTORS®.
Even if the MLS offer of compensation system is removed from the MLS per the proposed settlement, SCR forms such as SCR120 compensation agreement, SCR310 purchase agreement, and SCR buyer agency and listing agency agreements can replace the MLS offer of compensation system.
Currently, REALTORS® use SCR120 compensation agreements in lieu of MLS offers of compensation for FSBO sellers and when outside their MLS system. So, REALTORS® are familiar with this process.
SC REALTORS® are already using written, transparent agency forms with their buyer clients. If the settlement requires using a buyer agency agreement, that will be status quo in SC.
If the settlement requires a written agreement (e.g., buyer agency, non-agency transaction brokerage, subagency) prior to showing a home in expectation of compensation, SC REALTORS® are already familiar with this process.
When staffing your listing brokerage’s open houses, you will explain and give a copy of SCR110 the LLR brokerage relationship form when engaging in substantive contact with a consumer entering the open house.
The sooner you can convert a consumer into a client or customer under a written agreement, the more protected you will be while working with the consumer and ultimately getting paid.
You should operate in accordance with your brokerage policies and SC laws and the NAR code of ethics.
Your brokerage may negotiate brokerage compensation depending on your BIC and your brokerage policies.
There are no set or standard industry numbers on commissions or compensation. Individual brokerages set their own pricing and avoid antitrust issues by not sharing price fixing or boycott information with competitors.
SC REALTORS® are familiar with properly using SCR listing agreements that allow filling in blanks for compensation and paying cooperating brokerages. Zero or a number can be put into these blanks in accordance with your brokerage’s policies.
You should operate in accordance with your brokerage policies and SC laws and the NAR code of ethics.
Your brokerage may negotiate brokerage compensation depending on your BIC and your brokerage policies.
There are no set or standard industry numbers on commissions or compensation. Individual brokerages set their own pricing and avoid antitrust issues by sharing price fixing or boycott information with competitors.
While offers of compensation will not be allowed to be displayed on the MLS and while there won’t be an MLS-generated agreement between brokers if the proposed settlement is settled, SC REALTORS® are already using the SCR120 compensation form to negotiate compensation with brokerages that are not members of the MLS. This form may be more frequently used going forward, and it may make sense to have this agreed to, at the buyer’s direction, before showing the buyer the property. We are working to simplify the process for initiating and completing this form.
In addition to having their financial obligation offset by cooperating compensation, buyers will continue to have the option to pay the buyer’s brokerage directly or ask the seller to pay the buyer-agent compensation as a concession in the SCR310 purchase agreement, see section #6 Seller Paid Buyer’s Transaction Costs.
SC REALTORS® and buyers are already utilizing these three compensation options or a combination of them. After settlement implementation, these may change slightly.
Click to view our Options of Buyer Agent Compensation infographic
If the settlement is settled, the main change is the MLS will no longer display offers of compensation and the MLS will not allow substitute methods to communicate offers of compensation such as agent to agent MLS remarks, or uploaded MLS documents, or other unusual MLS communications of the offer of compensation.
SCR aims to ensure that all of our Brokers and Members are fully prepared for the changeover to the new settlement compliant versions of our forms on August 1.
The updated versions of the following forms are available for download as zipped files at screaltors.org/forms (login required).
- Form 120 – Compensation Agreement
- Form 130 – Exclusive Right to Buy Buyer Agency Contract
- Form 220 – Exclusive Right to Sell Agreement Listing Agreement
- Form 310 – Agreement/Contract to Buy and Sell Residential Real Estate
- Form 138 – Transaction Brokerage Agreement
- Form 135 – Exclusive Agency Buyer Contract;
- Form 136 – Exclusive Right to Buy Transaction Brokerage Agreement
- Form 221 – Exclusive Right to Sell Transaction Brokerage Agreement
- Form 210 – Exclusive Agency Listing Agreement
- Form 330 – Agreement/Contract: To Buy and Sell Real Estate (Lots/Acreage)
- Form 300 – Agreement/Contract: To Buy and Sell Real Estate (Residential/Condo)
The current versions of these forms will remain available in the SCR forms library under the dropdown list until August 1, when they will be replaced by these updated versions.
ZipForms and other providers will have the new forms updated in their library in early August.
Settlement Coverage
The agreement would release the following organizations from liability for the claims brought on behalf of home sellers related to broker compensation:
- All state REALTOR® associations
- All local REALTOR® associations
- All association-owned MLSs
- All brokerages with an NAR member as principal whose residential transaction volume in 2022 was $2 billion or below
Buyer agency and listing agency agreements can replace the MLS offer of compensation system.
Currently, REALTORS® use SCR120 compensation agreements in lieu of MLS offers of compensation for FSBO sellers and when outside their MLS system. So, REALTORS® are familiar with this process.
For brokerages with 2022 transaction volume above $2 billion, there is the ability to opt in to the settlement under pre-negotiated terms. This will apply to nearly all brokerages not covered.
Agents affiliated with HomeServices of America and its related companies are not released under the settlement nor do they have the ability to opt in to the pre-negotiated settlement. This is also true for the employees of the remaining corporate defendants named in the cases covered by this settlement.
Settlement Changes
- The court granted preliminary approval on April 24, 2024.
- The practice changes set forth in the settlement agreement will take effect August 17, 2024, and class notice will take place no earlier than that date.
- The settlement is subject to final court approval. The final approval hearing is scheduled to take place on November 26, 2024.
- There are strong grounds for the court to approve this settlement because it is in the best interests of all parties and class members.
Yes, you may continue making offers of compensation in the MLS until the settlement is approved and implemented. It is likely that the changes would be implemented in July or sometime afterwards.
The proposed settlement prohibits all offers of compensation on the MLS. It prohibits the MLS from creating or supporting any mechanism for making cooperative compensation offers, even off the MLS if related to the MLS.
The MLS is also prohibited from disclosing listing broker compensation or total broker compensation. Sellers will be able to offer seller concessions on the MLS, but they cannot be conditioned on retaining or paying a buyer representative. See section #6 Seller Paid Buyer’s Transaction Costs in SCR310.
Yes, the proposed settlement does not prohibit offers of compensation to buyer brokers or other buyer representatives outside the multiple listing service.
Yes. A brokerage may display data and data feeds from an MLS and offer compensation to buyer brokers or other buyer representatives but only on listings from their own brokerage
Yes. To be legally enforceable, compensation should best be in a proper written agreement such as SCR120 compensation agreement.
The types of compensation available for buyer brokers would continue to take multiple forms, depending on broker-consumer negotiations, including but not limited to:
- Fixed-fee compensation paid directly by consumers
- Concession from the seller
- A shared portion of the listing broker’s compensation
Compensation would continue to be negotiable and should always be negotiated between agents and the consumers they serve.
As implementation gets closer, SCR will provide training on the mechanics of each payment option.
- SCR buyer agency agreements.
- SCR listing agreements, cooperative compensation.
- SCR120 compensation agreement.
- SCR310 purchase agreement “Seller Paid Buyer’s Transaction Costs”
Listing brokers should inform their clients that offers of compensation will no longer be an option on an MLS after approximately July 2024 or shortly thereafter if the settlement is settled by then.
This change will not prevent offers of cooperative compensation off MLS. It will not prevent sellers from offering buyer concessions on an MLS (e.g., concessions for buyer closing costs).
Compensation would continue to be negotiable and should always be negotiated between agents and the consumers they serve.
As implementation gets closer, SCR will provide training on the mechanics of each payment option.
- SCR buyer agency agreements.
- SCR listing agreements, cooperative compensation.
- SCR120 compensation agreement.
- SCR310 purchase agreement “Seller Paid Buyer’s Transaction Costs”
This information is only accurate as of 03/22/24. You must contact SCR for updates and changes to this information after 03/22/24 as laws and regulations may change over time. Call the Legal Hotline at (803) 772-5206 or email Byron King at byron@screaltors.org