It’s a Done Deal: Judge Approves Final Settlement in NAR Commissions Lawsuit
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From staff reports
A federal judge has approved a final settlement between the National Association of Realtors (NAR) and a group of home sellers, requiring NAR to rewrite its commission rules and pay $418 million in damages. This settlement announced Tuesday stems from the class-action antitrust lawsuit accusing NAR and several brokerages of inflating seller-paid commissions through mandatory cooperation rules.
The changes spurred by this Sitzer/Burnett case, effective since August 17, 2024, mark a major shift in how real estate agents are paid, ending longstanding practices that plaintiffs argued forced sellers to pay excessive fees. The agreement also avoids the $1.8 billion in damages a jury awarded in a similar case in 2023, resolving numerous related lawsuits.
The settlement releases liability for over 1.4 million NAR members, associations, and brokerages, but parties who object to the settlement agreement still have the right to appeal, Realtor Magazine reported last week.
“NAR’s goal throughout this process was to protect as many NAR members and their businesses; state, local, and territorial associations of REALTORS; and multiple listing services as possible while preserving choice for consumers in their approach to buying or selling a home,” NAR President Kevin Sears said in a release.
“The principles of transparency, competition, and choice are core to the settlement agreement and empower real estate professionals and consumers to negotiate the services and compensation that work for them.”
Ahead of the court-mandated changes, NAR changed its practices so that Realtors who list properties for sale on Multiple Listing Service (MLS) will be required to enter into written agreements with buyers before touring a home.
Would that make open houses look different in the future? No, NAR says. “You do not need a written agreement if you are just speaking to an agent at an open house or asking them about their services,” NAR said in a lengthy 121-Frequently Asked Questions post about the settlement.
Real estate professionals now face updated guidelines on how and where they may communicate about offers of compensation. These offers can no longer be listed on MLS platforms. However, sellers still have the option to provide compensation outside of the MLS system. Additionally, sellers can use the MLS to offer buyer concessions, such as covering closing costs, NAR said.
