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“If I go, there will be trouble … and if I stay, it will be double.”
The Clash’s lyrics capture the current uncertainty surrounding zero-fee touring agreements in the wake of the National Association of Realtors commission lawsuit settlement. One moment, it seems clear that these agreements, when used correctly, lock in compensation terms. The next, we’re told that a new agreement with different terms can be established later. So, which is it?
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Not long ago, I wrote an article covering a number of problematic activities or questionable workarounds that had been clearly identified as prohibited under the National Association of Realtors (NAR) settlement. While clarity has been scarce in the post-Sitzer | Burnett world, one issue that seemed more straightforward last November — touring agreements — has now become a prime example of the industry’s persistent inconsistencies in both interpretation and practice.
Notably, this disconnect — both blatant and troubling — has been largely overlooked. For those paying attention, the guidance on these agreements has shifted, raising pressing concerns about whether the intended changes from the settlement will hold firm or unravel through loopholes.
To bring this issue to the forefront, the following highlights important developments that more Realtors should recognize, call out, and push to resolve, featuring a special interview with Professor Tanya Monestier, whose insights shed critical light on the matter.
The conflicting interpretations
In a motion filed in the Sitzer | Burnett case in November 2024, prior to final court approval, the plaintiffs’ attorneys emphasized that if a broker and buyer enter into a zero-fee touring agreement, the broker is bound by the compensation terms of that agreement for any properties shown under its scope. Importantly, this also means the broker cannot later establish a new agreement with different compensation terms for those same properties.
Conversely, in a recent episode of the Real Estate Insiders Unfiltered podcast, Lesley Muchow, NAR’s general counsel, suggested that Realtors can use touring agreements and charge zero dollars for the service — allowing buyers to view properties without pre-negotiating any buyer broker compensation.
Further, she indicated that it is permissible for a Realtor to enter into a subsequent agreement outlining different compensation terms if the buyer decides to proceed with an offer on a property viewed during the tour.
The idea is that the former agreement is for property tours only, and the subsequent agreement is for buyer representation in connection with a purchase offer. At first glance, this sounds reasonable. But step back, and it starts to look a lot like the way things worked before.
Perhaps it bears repeating: One problem that buyer representation agreements — and the requirement that they be signed before a property tour — were meant to address was steering. By making compensation discussions explicit from the outset, the goal was to prevent agents from subtly guiding buyers toward homes that offer them the best payday. Yet, if touring agreements provide an easy and legitimate way around these rules, what has really changed?
To put it more bluntly, if a touring agreement locks in a zero-dollar commission structure, then allowing a later renegotiation creates a workaround that undermines the settlement’s intent, keeping steering, commission uncertainty, and disclosure issues alive.
The buyer quandary: Trust, transparency and touring agreements
The flip side to this entire situation — perhaps an argument against the practice changes and potentially what the Department of Justice was hinting at with their Statement of Issues filed late last year — is the concern that forcing buyers into written agreements before home tours may not always align with their best interests, or with what they are comfortable doing.
Buyers are often hesitant to sign a buyer representation agreement the moment they meet an agent and tour a property. Committing to pay a commission upfront can be a tough sell, especially when they haven’t had time to build trust with the agent. This reluctance, both real and perceived, has fueled the rise of zero-fee touring agreements, which allow buyers to view properties without committing to compensation terms right away.
While it’s understandable that no buyer wants to feel locked in immediately, this creates a conundrum: Either we uphold the buyer representation agreement — ensuring transparency and commitment upfront — or we risk undermining the spirit of the settlement.
A broader concern: The settlement’s loopholes
If NAR’s interpretation holds, the settlement’s promise of transparency and the elimination of theoretical steering could be severely weakened — or, in layman’s terms, be all for nothing. Agents could use zero-fee touring agreements to gain buyer loyalty without discussing compensation upfront, then negotiate commission terms once the buyer is emotionally invested in a property.
Of course, therein lies the precise problem: It may not actually be a negotiation at all. The offering of compensation from the seller or listing broker may already set the stage for the compensation terms between buyers and their representatives. Before you know it, the settlement has no value whatsoever — or at least utterly fails to do what it was supposed to do. Essentially, it’s the same old song and dance that got NAR and its Realtor members into trouble in the first place.
Moreover, this incongruity poses significant questions about whether the settlement’s core objectives — eliminating steering and ensuring clear, upfront commission agreements — are truly being met.
A conversation with Professor Tanya Monestier
To explore these contradictions further, I reached out to Professor Tanya Monestier, whose formal objection to the NAR settlement was one of the most widely recognized. Her objection specifically raised questions about touring agreements as a potential workaround, a point that the plaintiffs’ attorneys directly addressed in their filings. Below is our discussion about the issue and its broader implications.
On the touring agreement as a workaround
Goralik: Your objection highlighted the issue of touring agreements potentially being used as a workaround to avoid upfront compensation negotiations. For Realtors who may not have read your 136-page objection, could you briefly explain what led you to flag this issue?
Prof. Monestier: After the settlement was announced, we saw lots of different ways that industry participants were trying to use the settlement to their advantage. Zillow was one of the first to create a so-called “touring agreement” to ease buyers into a longer-term relationship. To the extent that the touring agreement is a “get to know you” arrangement, it’s probably fine. But if you are a Realtor and you’ve agreed to a zero percent fee for houses toured during a seven-day period, and the buyer wants to put an offer on a property viewed during that period, you are not entitled to a commission.
Goralik: What was your takeaway from the plaintiffs’ attorneys’ response to your concern about touring agreements?
Prof. Monestier: My immediate read of the plaintiffs’ filing was that these touring agreements are not allowed — at least not in the way that they are currently conceived (zero percent initial fee with a bump up to 2.5 percent or 3 percent later). But, if you look closely, they were sort of cagey in their response. So, honestly, I have no idea what their position is. And that’s the problem: The plaintiffs and defendants are constantly moving the goalposts, so no one knows what’s going on.
On NAR’s position
Goralik: Lesley Muchow, NAR’s general counsel, has suggested that a touring agreement may only cover property tours and that compensation terms for buyer representation in connection with a purchase offer can be negotiated afterward. How does this interpretation compare with what the plaintiffs’ attorneys stated in response to your objection?
Prof. Monestier: As I mentioned, I thought the plaintiffs were on board with the fact that you can’t do this, but clearly NAR thinks otherwise. I think NAR’s position is fundamentally unsound and, carried to its logical extreme, would completely gut the settlement.
Let me explain using the Zillow touring agreement. The Zillow agreement says that a buyer can tour properties for seven days for a zero percent fee, and then the parties can later agree to a full representation agreement.
First, as a matter of contract law, this piece of paper is about as legally binding as an IOU from a 6-year-old. It does not have any force in law, and it can’t bind you to signing a subsequent contract with a broker.
Second, and most importantly for our purposes, if a seven-day zero percent touring agreement is possible, then a 180-day zero percent touring agreement is possible. What is to stop a brokerage from signing up clients at zero percent, touring for months, and then signing a full buyer representation agreement once the buyer is ready to put in an offer? And guess what?
At that time, the buyer will know exactly how much compensation is being offered by the seller, so the buyer representation agreement will end up matching what the seller is offering. This is literally identical to the system we had in place pre-settlement, except that now there’s a meaningless piece of paper that is signed at the outset of the relationship.
Goralik: Lesley Muchow drew a distinction between “touring services” and “brokerage services” — in other words, the touring agreement is only for touring services, and the full representation agreement at a set amount or rate is for brokerage services. What are your thoughts on this?
Prof. Monestier: I don’t think this distinction makes sense — at least not as it concerns touring agreements.
Under the settlement, a Realtor is only obligated to have a written agreement in place if he is “working with” a buyer. If we are saying that touring a home is not “working with” a buyer, then a Realtor does not need a written agreement. So why are we even making anyone sign anything?
Conversely, if touring a home is “working with” a buyer, then the touring agreement needs to set the maximum compensation rate for the broker for homes viewed during that agreement.
You can’t have it both ways. If so-called “touring services” don’t rise to the level of working with a buyer, then the settlement provision is not engaged at all. This means that brokers can tour away with buyers sans agreements in place, so long as they are not stepping into “brokerage services” territory. You can see how that leads to a very slippery slope.
Goralik: Are there any concerns you have about these agreements from a consumer protection standpoint?
Prof. Monestier: Absolutely. These agreements don’t — and can’t — bind a buyer to signing a subsequent representation agreement with a broker. But I don’t think the average buyer is going to understand that. They will feel (and they might even be told) that they are obligated to use the touring agent if they want to put an offer on the property.
For instance, the Zillow agreement says, “If Broker is going to provide Buyer with brokerage services beyond the Touring Services, Buyer and Broker will enter into a separate agreement for such additional brokerage services.” It does not make it clear that a buyer can choose any broker to represent him in putting an offer on the property. I think most buyers will think the language suggests the opposite.
Goralik: Given NAR’s position, do you think this leaves room for further legal challenges down the road?
Prof. Monestier: That’s a good question, and one that I don’t have a good answer to. The problem is that the parties have refused to clarify so many fundamental aspects of the settlement.
The idea of a “touring agreement” has been out there for almost a year now. No one other than me (and now, you) is calling it out as a settlement loophole. So, do I think a year from now, the plaintiffs’ attorneys will call up Zillow and say, “Hey, by the way, that touring agreement you have — we don’t think it’s compliant with the settlement.” Unlikely. If someone was going to do something about it, they would have done so already.
On future litigation and industry implications
Goralik: If this loophole isn’t addressed, do you see the potential for additional lawsuits or regulatory intervention?
Prof. Monestier: I don’t know that I’m seeing more lawsuits in the future premised on these same issues (other than the ones out there).
But regulatory intervention has made things even more complicated. Even though it’s early days, I think we’re seeing two approaches: legislation to basically implement the settlement across all real estate agents or legislation to change crucial aspects of the NAR settlement.
For instance, in Alabama, they are considering a law which would essentially override the requirement that buyers sign an agreement before touring. This is likely in response to the DOJ’s concerns that you shouldn’t lock people into contracts so early in the process. But if states start to override the settlement, then what was the point of the settlement to begin with? How can we say that this settlement is “historic” and “groundbreaking” when it is so easily disassembled by states?
To be clear, I am not saying that legislators should not be legislating. I am actually saying the opposite: They should be the only ones legislating.
Goralik: What advice would you give to Realtors who are trying to operate ethically while also remaining competitive in this changing landscape?
Prof. Monestier
