National Association of REALTORS® Reaches Agreement to Resolve Nationwide Claims Brought by Home Sellers

The National Association of REALTORS® has reached an agreement to settle nationwide claims brought by home sellers. This resolution marks a significant step in addressing concerns raised by sellers regarding real estate practices. Details of the agreement aim to address various issues and provide recourse for affected parties within the real estate market.

The National Association of REALTORS® (NAR) has announced a groundbreaking agreement aimed at resolving litigation surrounding claims brought by home sellers concerning broker commissions. This agreement, subject to court approval, signifies a pivotal moment in the real estate industry and involves over one million NAR members, as well as various state/territorial and local REALTOR® associations, association-owned MLSs, and brokerages with NAR members as principals, with a residential transaction volume in 2022 of $2 billion or less.

Under the terms of the settlement, NAR will pay $418 million over a period of approximately four years. While maintaining its position of denying any wrongdoing in connection with the Multiple Listing Service (MLS) cooperative compensation model rule, which was established in the 1990s, NAR emphasizes its commitment to preserving consumer choice and protecting its members.

One of the critical achievements of this resolution is the release of most NAR members and numerous industry stakeholders from liability. Furthermore, cooperative compensation remains an available option for consumers during home transactions. NAR has also facilitated a mechanism for brokerage entities with a residential transaction volume exceeding $2 billion in 2022 and MLSs not wholly owned by REALTOR® associations to obtain releases efficiently, if desired.

Despite extensive efforts, agents affiliated with HomeServices of America and its related companies, along with employees of the remaining corporate defendants, are not included in the settlement.

In addition to the financial aspect, NAR has agreed to implement a new MLS rule prohibiting offers of broker compensation on the MLS. However, consumers can still explore compensation options off-MLS through negotiation with real estate professionals. Additionally, a new rule will require MLS participants working with buyers to enter into written agreements with their buyers, promoting clarity and transparency in transactions.

These changes are set to take effect in mid-July 2024. Nykia Wright, Interim CEO of NAR, expressed that while the settlement comes with a significant cost, it represents the best possible outcome in the circumstances and provides a path forward for the industry.

Kevin Sears, NAR President, emphasized the organization's commitment to innovation and guiding the industry forward, assuring that buyers and sellers will continue to have ample choices and that NAR members will uphold their commitment to serving clients diligently.

As America’s largest trade association, representing over 1.5 million members in residential and commercial real estate, NAR remains dedicated to its mission of protecting and advancing real property ownership rights while upholding its strict Code of Ethics.

Sourced From NAR