The National Association of REALTORS® (NAR) announced an agreement today aimed at ending litigation related to claims from home sellers concerning broker commissions. This settlement, awaiting court approval, addresses claims against NAR, its members numbering over a million, all affiliated state, territorial, and local REALTOR® associations, association-owned Multiple Listing Services (MLSs), and brokerages with an NAR member as principal with a residential transaction volume of up to $2 billion in 2022. Under this agreement, NAR, while continuing to deny any wrongdoing, will pay $418 million over about four years. The litigation concerns the MLS cooperative compensation model rule introduced in the 1990s following calls for buyer representation from consumer protection advocates.
Nykia Wright, Interim CEO of NAR, emphasized the organization’s dedication to resolving the litigation in ways that benefit its members and consumers, aiming to preserve consumer choice and member protection. The settlement notably includes the release of most NAR members and various industry stakeholders from liability regarding these matters, and maintains consumer choice in cooperative compensation for buying or selling homes. It also introduces a mechanism allowing brokerage entities with transaction volumes above $2 billion in 2022 and certain MLSs to efficiently obtain releases if desired. However, agents affiliated with HomeServices of America and related companies, as the last corporate defendant still litigating the Sitzer-Burnett case, are not included in the release, nor are employees of other remaining corporate defendants covered by this settlement.
Additionally, NAR has consented to implement a new MLS rule that bans the communication of broker compensation offers through the MLS, although such offers can still be pursued off-MLS. This move is aimed at making professional representation more accessible and affordable, increasing fair housing opportunities, and expanding the buyer pool for sellers. NAR is also introducing a requirement for MLS participants working with buyers to have written agreements with them, reinforcing the use of buyer brokerage agreements to clarify the services and value provided.
NAR leaders expressed their perspective that continuing litigation would harm members and their small businesses, suggesting that the settlement represents the best possible outcome under the circumstances. They highlight the agreement as a pathway forward for the industry, which significantly contributes to the American economy, and for NAR itself. Kevin Sears, NAR President, stated the organization’s commitment to leading the industry forward, emphasizing innovation and the ongoing provision of value to its members and consumers. Despite the settlement’s substantial financial implications, NAR views the benefits it will bring to the industry as justifying the cost, marking a period of adjustment while maintaining the core dynamics of choice and protection for buyers and sellers.
For the full details and insights, please refer to the original press release at the following link: https://www.nar.realtor/newsroom/nar-reaches-agreement-to-resolve-nationwide-claims-brought-by-home-sellers