Wyoming agents react to national real estate settlement

However, Wyoming experts say that because of existing laws, a blockbuster settlement between the National Association of REALTORS® (NAR) and home sellers related to broker commissions may not change much in the state.

On March 15, NAR announced a $418 million settlement agreement to resolve claims against the NAR — including over one million members in all state, territorial and local REALTOR® associations, all association-owned multiple listing service (MLS) and all brokerages with an NAR member as principal — to resolve nationwide claims brought by home sellers, although NAR “does not admit wrongdoing” under the settlement.

The decision stems from a specific set of sellers in Kansas City, Mo., wherein a lead plaintiff in the case was told to choose from commission options — 6%, 7%, 8% or 9% — upon selling their home. That commission was to be split by the selling and buying agents, and the homeowner was told she could not negotiate the commission below 6%, according to the New York Times.

“I truly think things got out of hand in this one particular community, and they were not doing the same practices that are on our standard forms in Wyoming,” Wendy Volk, a state licensed Real Estate Broker Associate at #1 Properties in Cheyenne, said in an interview with The Sheridan Press this week.

Wyoming state law (WS 33-28-101) details standards for compensation in real estate activity, among other legal requirements, for agents practicing in Wyoming. Further, Volk said that as a member of local, state and national trade associations, she acts in accordance with ethical standards of disclosure as well as those required by state law.

Licensed real estate agents do not have to become a Realtor, or members of the NAR, Buck Wilson, president of the Wyoming Association of Realtors, said in an interview with The Sheridan Press.

Those who are, however, can use “that big ‘R’ we are all proud of.”

“In doing so, we follow a code of ethics, rules and, if we participate with MLS (multiple-listing service) … that MLS is very powerful because it has information about what is available for potential buyers and sellers,” Wilson said.

Volk explained standard contracts for agents who are members of Wyoming REALTORS® include discussion of commissions.

“We go through them with the seller, we discuss a commission with the seller, we ask the seller if they want to cooperate and offer compensation to other agents that might bring a buyer,” Volk said. “Every time I list a house, I go through those basic questions, yes or no, do you want to cooperate or not? Do you want me to share the commission or not share the commission? That is standard.”

When working with a buyer, Volk said she goes through a similar process. She asks buyers if they want to buy a specific house already selected or if they’d like to search multiple listings. She explains that some sellers will want to cooperate, sharing a commission that will ultimately pay her, but she discloses that others will not offer compensation.

“I have to say to my buyer, ‘Are you willing to pay me if the seller (isn’t)?’” Volk said.

National media outlets have said the settlement could mean the elimination of an automatic 6% commission, “a standard in home purchase transactions,” according to CNN. However, Wilson said there is no standard 6% commission in Wyoming, because the state has practiced what is called “buyers’ agency” since the 1990s. Buyers’ agency means agents help real estate buyers navigate the real estate market.

“I don’t really see a lot of changes (in Wyoming), to be honest, because of this settlement,” Wilson said.

State law already prohibits dual agency, or when the same real estate agent represents both the buyer and seller in a home purchase, although neighboring states like South Dakota do not.

“We have always worked to make (the process) better to protect the consumer, and that is something our legislators also have been fighting for: transparency in protecting consumers. In our listing agreements we completely outline how the commission may or may not be negotiated,” Wilson said.

MLS changes lead to more transparent communication

What will have an effect in Wyoming, though, are changes to the multiple listing service — a private database that is created, maintained and paid for by real estate professionals to help their clients buy and sell property. In addition to the financial payment, the NAR has agreed to put in place a new MLS rule prohibiting offers of broker compensation on the MLS. That rule will likely take effect this summer.

“We will not be able to disclose what the commission is (within the MLS),” Wilson said. “It is really about transparency. Sellers will still probably compensate buyers’ agents, but what agents are going to have to do is pick up the phone and say, ‘Hey, I’ve got buyers for your property. Are we going to get compensated for that?’”

That compensation, he said, may then be written into a contract and purchase agreement, which is also a change, but likely will not affect the transaction’s bottom line. Ultimately, Wilson said he believes most sellers will see the benefit in compensating a buyers’ agent.

“Frankly, most buyers are putting everything they’ve got into the house,” Wilson said. “But this scenario hasn’t happened with the settlement, because the settlement is not even final. It could change and modifications could happen, but as of right now, I just don’t see a big change in Wyoming because of existing laws.”

He also pushed back on the claim that housing prices are driven by real estate commissions.

“Pricing has always really been driven by the market, what a seller is willing to sell a property for and what a buyer is willing to pay,” Wilson said.

This story was published on April 6, 2024.