Unpacking the NAR Lawsuit

Landen Calvert April 15, 2024

Unpacking the NAR Lawsuit

When working in the field of real estate, staying informed and understanding legal developments is crucial. That being said, we have some important updates we would like to share, as our work together in the future could look a little different! This past month the National Association of Realtors (NAR) has been at the forefront of all-things real estate. To resolve a commission lawsuit, NAR has agreed to a $418 million settlement. To better understand what this means for buyers and sellers, and its impact on the industry, let's dive into the details. 


First, it's important to understand the background. NAR is a real estate powerhouse. While NAR is comprised of millions of members and has been known to set standards for our industry and provided policies, it has faced scrutiny over both competition and transparency. The U.S. Department of Justice filed the lawsuit in 2020, alleging that some NAR rules restrict competition and prevent home sellers from finding alternative, cost-effective options. The current lawsuit specifically targets the NAR’s policies on the sharing of commission between buyer and seller’s agents, also including  rules related to online listings.


What we need to know:

  • NAR, Keller Williams, and Homeservices were all found guilty of colluding to keep commission rates high in the Sitzer/Burnett vs. NAR case.
  • As of July 2024, buyer broker compensation can no longer be listed on the MLS.
  • Offers may continue to be made through off-MLS negotiations.  Although this concept is new to residential real estate, it is a more common practice in commercial real estate. Often offers are submitted with a request for cooperating cooperation in commercial deals.
  • NAR has been stressing the use of buyer’s agent agreement for years now. After the lawsuit, a new rule will require usage of these agreements by all MLS participants working with buyers. This will clarify the obligations of buyers if seller fails to offer any cooperating compensation.
  • Buyers can expect clearer agreements and expectations from agents, and possibly more flexible and creative commission structures. 
  • Sellers can look forward to having more say in commission agreements and the possibility of more cost efficient selling options!
  • With these new rules, agents can take pride in completely transparent agreements and clear expectations of their work. This may lead to stronger relationships with clients, opening the door to a wider sphere of influence. 


These changes may seem like a lot, but at Freedom First Properties, we’re seasoned at doing things the right way. Our service to you can only get even better with these new regulations and we cannot wait to navigate it all together and get to work!


Thank you for your trust in us in this ever-changing legal world of real estate.


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