Updates on the NAR Class Action Lawsuit
At Marketplace Homes, real estate is our passion, so when big changes can affect how real estate agents do business, we’re all about getting the most accurate and well-rounded picture of the situation.
A lot of people are commenting on the latest news about the National Association of Realtors agent commissions settlement and how it will affect home buyers, home sellers, realtors, and other professionals in the real estate industry.
As developments are still ongoing, we decided to collect some insights from different talking heads in the industry. What do they think about this recent ruling about real estate commissions for buyers’ agents?
What is in the NAR lawsuit?
The media has been buzzing with details about the $418 million NAR settlement that happened on March 15, 2024. Prior to the settlement, in real estate transactions, the buyer’s agent commission was to be paid by the seller as part of closing costs, encompassing a 5-6% average from the total price of the home sale. In short, the buyer didn’t have to pay their agent’s fee.
According to the suit, this (allegedly) equates to antitrust, artificially keeping home prices and commission rates high while reducing competition in the industry. Now, buyer agent compensation will be negotiable. With this new change, it may allow sellers and their listing agent to feel more comfortable to discuss and negotiate the total commission and the way it is split between representation at closing.
In addition, the NAR will require buyer’s agents to make written agreements with all their clients, clearly stating fees before commencing any home showings or buyer representation.
While this settlement is certainly more complicated than just antitrust law, as it’s a result of several class action suits and years of litigation, broker commissions are the main focus in the media, plus what aftereffects this will have on everyone.
What are people saying about it? To be fair, we checked the NAR first.
On March 19, 2024, the NAR published an article called Correcting the Record: NAR Does Not Set Commissions. Here is an excerpt from their post. If you are curious about the rest, we also linked to the article in this paragraph.
“The National Association of REALTORS® (NAR) does not set commissions – they are negotiable. The rule that has been the subject of litigation requires only that listing brokers communicate an offer of compensation. That offer can be any amount, including zero. And other rules throughout the MLS Handbook and NAR policy expressly prohibit MLSs, associations, and brokers from setting or suggesting any such amount that should be included in that field. The text of the current rule is linked here and excerpted below, the text of our MLS Antitrust Compliance Policy is linked here and excerpted below, and a notice included in NAR’s MLS Handbook is below.
Again, the current rule that has been the subject of litigation does not set commissions.
As reflected in our release about the proposed settlement agreement, NAR has agreed to put in place a new MLS rule prohibiting offers of broker compensation on the MLS. Commissions remain negotiable, as they have been.”
This lawsuit settlement is certainly big news, which can affect everything from the typical home’s sale price, how real estate brokerages do business, and much more. Many people in the industry have something to say about it all. Today we’ll share some of their opinions.
What are other people saying?
According to the experts, this recent settlement will definitely result in changes for buyers, homeowners, sellers’ agents, buyer brokers, and pretty much anyone who does business related to the housing market.
It’s important to do your own research about these new rules as different experts have varying opinions on the matter. To be fully informed, stay on top of the real estate market by reading informative sources like Inman Select and discuss your concerns with a trusted real estate agent.
Opinions vary widely, from some seeing it as “no biggie” to others seeing the settlement as an event that will turn the way Americans buy and sell homes on its head. To go right to the source, click on the quote boxes!
When will the rule change?
The rule changes are set to go into effect in mid-July 2024. America’s real estate businesses will be closely watching how the changes will affect the way we do business and how we can best help our clients achieve their real estate goals!
Let’s chat!
Do you have concerns or questions about this new rule? If you need information to help you plan any next steps regarding listing a home for sale or buying a new construction home, we are here to help. We have weathered many changes in the real estate industry, and this is just another one that we will adapt to! Contact us today by clicking on the button below to set up a call!
Alicia Persson is a Content Strategist SEO writer at Marketplace Homes, utilizing previous years of experience on real estate teams that specialized in investments and property management. Before she joined Marketplace Homes, she was also a freelance writer for 7 years, leading to a specialization in real estate and home living content for boutique digital marketing agencies. During her writing years, she learned the basics of SEO and gained experience writing for many different clients, making her versatile at creating diverse content.
She is a proud University of Virginia master’s graduate and enjoyed her undergraduate years at the University of Mary Washington. When Alicia is not writing, she plays keytar and sings in a local 90’s rock cover band, or she spends time with her amazing family.