NAR Settlement Information

NAR Settlement Updates

On March 15th, the National Association of Realtors® announced a proposed settlement agreement that would end litigation of claims brought on behalf of home sellers related to broker commissions.

The agreement would resolve claims against NAR, over one million NAR members, all state/territorial and local Realtor® associations, all association-owned Multiple Listing Services (MLSs), and all brokerages with an NAR member as principal that had a residential transaction volume in 2022 of $2 billion or below.

The settlement is subject to court approval. View facts about the proposed settlement and more.

It’s important to note that practices won’t change today. It’s expected that the changes, if approved, will be implemented in mid-July. NAR expects the process will take several months or longer.

 

Resources

 

 Videos 

 

What Does the NAR Class Action Notice Mean for REALTORS® and Their Business

July 30, 2024

 

How Will Existing Offers of Compensation Change After the NAR Settlement Agreement

July 30, 2024

 

How Listing Agreements Are Changing Following the NAR Settlement Agreement

July 30, 2024

 

How the NAR Settlement Affects Broker-to-Broker Agreements

July 30, 2024

 

How are Seller Concessions Impacted by the NAR Settlement Agreement

July 30, 2024

 

Litigation Update From NAR president Kevin Sears and CLO Katie Johnson

March 15, 2024

 

MAR Legal Counsel Jaymie Bowditch: Discussing the NAR Settlement for Montana and MAR Members.

 

Kevin Sears: Discussing Key Settlement Considerations and Ongoing Advocacy Efforts On the Road

March 21, 2024

 

NAR President Kevin Sears spoke at a lunch Forum for MAR members on April 11, 2024 with information regarding the proposed NAR Settlement.

Information About the Settlement 

NAR has always wanted to reduce the significant strain on its members and provide a path forward for the industry, and from the beginning of this litigation, NAR had two goals:

  • Secure a release of liability for as many of our members, associations, and MLSs as we could;
  • Preserve the choices consumers have regarding real estate services and compensation.

This proposed settlement achieves both of those goals and provides a path for the industry to move forward and continue NAR’s work to preserve, protect and advance the right to real property for all.

 

Key Terms of the Agreement

Two critical achievements of this resolution are the release of most NAR members and many industry stakeholders from liability in these matters and the fact that cooperative compensation remains a choice for consumers when buying or selling a home.

The settlement, which is subject to court approval, makes clear that NAR continues to deny any wrongdoing in connection with the Multiple Listing Service (MLS) cooperative compensation model rule (MLS Model Rule).

A few key details of the settlement agreement:

  • The agreement would resolve claims against NAR, over one million NAR members, all state/territorial and local REALTOR® associations, all association-owned MLSs, and all brokerages with an NAR member as principal that had a residential transaction volume in 2022 of $2 billion or below.
  • For nearly all brokerage entities that had a residential transaction volume in 2022 that exceeded $2 billion, and for MLSs not wholly owned by Realtor® associations, NAR also secured in the agreement a mechanism to obtain releases efficiently if they choose to use it.
  • NAR fought to include all members in the release and was able to ensure more than one million members are included.
  • Despite NAR’s efforts, agents affiliated with HomeServices of America and its related companies — the last corporate defendant still litigating the Sitzer-Burnett case — are not released under the settlement, nor are employees of the remaining corporate defendants named in the cases covered by this settlement.

Under the terms of the agreement, NAR would pay $418 million over approximately four years.

  • In addition to the financial payment, NAR has agreed to put in place a new MLS rule prohibiting offers of broker compensation on the MLS.
  • Offers of compensation could continue to be an option consumers can pursue off-MLS through negotiation and consultation with real estate professionals. Sellers can offer buyer concessions on an MLS (for example—concessions for buyer closing costs) via the MLS, provided that such concessions are not conditioned on the use of, or payment to, a buyer broker.
  • This change is expected to go into effect in July of this year.