Recent headlines have highlighted the lawsuit involving the National Association of REALTORS® (NAR) and its forthcoming settlement. If you’re a member of the real estate industry, you are undoubtedly concerned about how these events could influence your career. We appreciate your concerns – there’s much to consider. Below is a succinct summary of the legal case and settlement.
Please note: McKissock Learning will keep you updated on this evolving situation through a series of blog posts. For a comprehensive evaluation of the proposed NAR settlement and its effects on the industry, refer to McKissock Learning.
Key Takeaways
- Recent news about the NAR lawsuit and the expected settlement has caused concern throughout the industry.
- The lawsuit, Burnett v. NAR focused on the practice of disclosing commissions to buyer agents through Multiple Listing Services (MLS).
- The expected settlement, set to be implemented in August 2024 pending court approval, aims to enhance transparency in real estate transactions by mandating written buyer agreements that specify agent compensation, potentially changing the way services are offered in the market.
NAR Lawsuit: Burnett v. NAR, et al. Judgment
On October 31, 2023, a federal jury in the U.S. District Court for the Western District of Missouri held NAR and certain brokerages accountable for artificially increasing buyer agent commission fees.
The lawsuit addressed the issue where seller agents publicize specific commissions to buyer agents via Multiple Listing Services (MLS). Critics argue this practice motivates buyer agents to favor properties with higher commissions.
In defense, NAR stated, “NAR does not determine commissions, which have been negotiable long before this settlement and will continue to be negotiable among brokers and their clients.”
Proposed Settlement of the NAR Lawsuit
In March 2024, NAR and plaintiffs agreed on a proposed settlement regarding broker commissions on behalf of home sellers. Awaiting court approval, this settlement is planned to start in August 2024.
Under the proposed terms, REALTOR® members acting as buyer agents will be required to sign written agreements with buyers before offering services like property showings or submitting offers. Compensation for buyer agents will be clearly detailed in these agreements, possibly based on a percentage of the sale or a fixed rate.
Impact of the Proposed NAR Lawsuit Settlement
Besides fostering greater transparency regarding commissions and fees, the settlement might introduce further changes that offer consumers more choices and help create a fairer real estate market. To understand these changes and their consequences for real estate agents and brokers, subscribe to the McKissock Learning blog.
Despite these changes, one constant remains for current agents and brokers: the necessity of completing state-specific continuing education courses. Keep your real estate license current by seeking guidance from McKissock Learning today.
