“Homebuying momentum is building after nearly two years of suppressed home sales,” said NAR Chief Economist Lawrence Yun.
Most of the counties in the HGAR market area are considered “high-cost areas” by the FHFA.
NAR officials noted yesterday that the court heard from all parties as well as objectors and the Department of Justice. Once arguments concluded, the court quickly ruled to grant final approval.
NAR officials noted yesterday that the court heard from all parties as well as objectors and the Department of Justice. Once arguments concluded, the court quickly ruled to grant final approval.
KANSAS CITY, MO—A little over a year ago, the real estate industry was shaken to its core when an eight-person jury in the U.S. District Court in Western District of Missouri found that the National Association of Realtors and two co-defendants liable in the federal Sitzer/Burnett trial, which challenged MLS rules and the real estate compensation model. The jury verdict on Oct. 31, 2023, of $1.78 billion under federal law could have been trebled to more than $5 billion.
Yesterday, Nov. 26, the U.S. District Court for the Western District of Missouri granted final approval of the National Association of Realtors’ proposed $418-million settlement agreement reached in March 2024 to resolve the class action claims related to broker commissions. The ruling could finally put the matter “in the rearview mirror” after NAR agreed to practice changes to settle the case that covered the Missouri markets of Kansas City, St. Louis, Springfield and Columbia but had national implications.
NAR officials noted yesterday that the court heard from all parties as well as objectors and the Department of Justice. Once arguments concluded, the court quickly ruled to grant final approval. The court is expected to issue a formal written order of the ruling soon.
The settlement secures a release of liability for more than 1.4 million NAR members, all state/territorial and local Realtor associations, Realtor Multiple Listing Services (MLSs), NAR’s affiliate organizations and all brokerages with an NAR member as principal that had a residential transaction volume in 2022 of $2 billion or below. The settlement also releases MLSs and brokerages that chose to opt-in to the agreement.
“This is an important moment for NAR members, home buyers and sellers, and the real estate industry,” said NAR President Kevin Sears, broker-associate of Sears Real Estate/Lamacchia Realty of Springfield, MA. “As consumer champions, NAR’s members have been working tirelessly to implement the practice changes required by the settlement and shepherd consumers through this period of transition. 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.”
NAR CEO Nykia Wright said, “NAR is committed to empowering Realtors to help home buyers and sellers successfully navigate what is often the most important financial transaction of their lives. Today and every day, NAR is focused on demonstrating the importance of agents who are Realtors in the marketplace, creating a transparent and inclusive home buying and selling process, and advancing the right to real property for all.”
Under the settlement, NAR will pay $418 million over approximately four years to the settlement fund. Membership dues for 2025 will remain unchanged from 2024.
NAR President Sears, in a meeting with HGAR leaders in White Plains on Oct. 7, 2024, said that if the settlement was approved, NAR would likely make the first payment in connection with the settlement—approximately $197 million—sometime during the first quarter of 2025. He said the funds would come out of NAR’s reserves.
He related that in 2026, 2027 and 2028, NAR will pay approximately $72 million each year to satisfy the settlement.
“If approved (by the court) on Nov. 26, we can finally put this in our rearview mirror,” Sears said at the HGAR meeting.
Yesterday, in an e-mail, NAR President Sears noted that “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. 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. Preserving this optionality, including whether to offer compensation, is important to NAR’s efforts to support first-time homebuyers and buyers from marginalized communities.”
He continued, “With this step behind us, NAR members must remain focused on implementing the practice changes and helping consumers navigate the new landscape. NAR and its membership must all continue to communicate and demonstrate the unique value of Realtors today and every day.”
While the commission case is settled, NAR’s issues with the U.S. Justice Department appear to remain unresolved. In a court filing on Nov. 24, the U.S. Justice Department’s Antitrust Division stated, “The United States continues to scrutinize policies and practices in the residential real estate industry that may stifle competition. It is a matter of public record that the United States has an open investigation into these practices.”
The Justice Department later stated. “Because the United States did not participate in either this litigation or the proposed settlement, the proposed settlement does not limit the United States’ ability to enforce the antitrust laws, including to seek greater relief for the conduct at issue here.”
NAR released a statement in response to the DOJ’s filing, stating: “Based on our interpretation, the DOJ does not appear to be concerned about the use of written buyer agreements, as many states require these agreements as a matter of law. Rather, the DOJ seems to take issue with the practice change that requires the use of written buyer agreements as a part of the settlement. The DOJ’s filing, however, lacks specificity, and this is our best understanding with the information we have available. NAR fully disagrees with the DOJ’s position and stands behind written buyer agreements as a tool to create transparency and empower consumer choice in residential real estate transactions.”
More information about the practice changes in the settlement agreement can be found at NAR Settlement FAQs. NAR officials stated that its 1.5 million members must adhere to the practice changes in good faith to maintain released status under the settlement agreement. NAR strongly opposes any attempts to circumvent the settlement.
For complete information about the settlement and the approval order once available, please visit facts.realtor.
“Homebuying momentum is building after nearly two years of suppressed home sales,” said NAR Chief Economist Lawrence Yun.
Most of the counties in the HGAR market area are considered “high-cost areas” by the FHFA.
Outdoor space was especially important to movers to the Midwest, while movers to the Northeast were particularly driven by the need for more square footage and a better work commute.
The real estate industry has expressed concerns regarding the potential repercussions of the FARE Act.
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