Find out how the NAR lawsuit impacts buyers, sellers, and agents.

If you’re considering buying or selling anytime soon, there’s one thing you need to know: Real estate rules have changed. Today, we’re breaking down the National Association of Realtors commission lawsuit. This lawsuit has been a hot topic in the real estate industry, sparking confusion and concern. We’re here to explain the lawsuit, the key changes it has brought, and how it affects real estate professionals and consumers. Here’s what you need to know:

1. Understanding the NAR lawsuit. First, let’s talk about what this commission lawsuit entails. Over the past 12 months, home sellers filed a class action lawsuit against NAR, accusing them of price fixing and a realtor conspiracy. The lawsuit resulted in a $1.8 billion judgment against NAR, and a settlement was reached six months ago that introduced several rule changes. Here are some of the key changes that took effect on August 17:

2. New rules. Here are the new real estate rules that will guide buyers, sellers, and Realtors in every real estate transaction.

  • Written buyer agreements. Realtors and buyers must now sign written buyer representation agreements to show homes to prospective buyers.
  • Upfront conversation about commissions. Buyers will need to discuss compensation fees directly with their agent now that the offer of buyer agent compensation is no longer displayed on the Multiple Listing Service (MLS).
  • Compensation remains negotiable. Compensation has always been negotiable and should continue to be discussed by each party with their respective agents.
  • Seller contributions. A new field in the MLS now discusses seller contributions, allowing sellers to choose to contribute towards buyers’ closing costs or the buyer agency fee.

“Transparency in real estate benefits both buyers and sellers.”

3. NAR myths. Myths and misconceptions arose naturally due to the confusion surrounding the issue.

  • Agents will be forced to reduce their fees. Fees remain negotiable as they always have been. Agents typically charge their fees based on their knowledge and expertise.
  • Sellers can’t offer compensation to buyer’s agents. Sellers still have the option to offer compensation to the buyer’s agent or contribute to closing costs.
  • Homeownership will be more affordable. The NAR settlement does not directly impact home prices. Home prices are primarily influenced by supply and demand, interest rates, and economic conditions.
  • Buyers will need to find homes on their own. Buyers can still engage a real estate professional’s services; they just need a written representation agreement outlining the agent’s services and compensation.
  • Buyers and agents don’t need to sign an agreement. The NAR settlement encourages more transparency by requiring buyers and agents to sign a written agreement.
  • Sellers must pay all fees. The new rules allow sellers to have more options. They have the option not to offer any compensation, but buyers may negotiate or counter with an offer for sellers to cover the fees.

While these changes may seem confusing, buyers and sellers will benefit from the potential for greater transparency in the industry. As real estate professionals, we’re committed to educating our clients—buyers, sellers, or investors—about how the process works and the value we bring to the table.

If you have any questions about this topic or if you need professional guidance in buying or selling, call us today at 1-855-SETH-BRO or email info@thesethbrothers.com. We’d be happy to help!