Recent headlines have highlighted the lawsuit involving the National Association of REALTORS® (NAR) and its proposed settlement. If you’re thinking about a career in real estate, you might be wondering how these developments could impact your future success in the field. We understand your concerns – there’s a lot to absorb. Here’s a brief overview of the court case and settlement for those interested in becoming real estate brokers.
Please note: Rockwell Institute will be covering updates on this ongoing situation through a series of blogs. For a detailed analysis of the proposed NAR settlement and its implications for the industry, turn to Rockwell.
Related content: Discover more about the NAR lawsuit and settlement through this informative webinar.
Key Takeaways
- Recent news about the NAR lawsuit and proposed settlement has drawn interest from those considering a career in real estate, prompting questions about potential impacts on future success in the industry.
- The lawsuit, Burnett v. NAR, concluded that the NAR and certain brokerages were liable for inflating buyer agent commission fees, particularly through the practice of advertising commissions to buyer agents via Multiple Listing Services (MLS). Critics argue this practice could influence agent priorities.
- The proposed settlement, expected to take effect in August 2024, aims to improve transparency in real estate transactions by requiring written buyer agreements that outline agent compensation. This could potentially change how services are delivered in the market.
NAR Lawsuit: Burnett v. NAR, et al. Verdict
On October 31, 2023, a federal jury in the U.S. District Court for the Western District of Missouri found the NAR and certain brokerages responsible for artificially inflating buyer agent commission fees.
The lawsuit targeted the practice where seller agents advertise specific commissions to buyer agents via Multiple Listing Services (MLS). Critics argue this practice incentivizes buyer agents to prioritize properties that offer higher commissions.
In response, NAR stated, “NAR does not set commissions, which have been negotiable long before this settlement and will remain negotiable between brokers and their clients.”
Proposed Settlement of the NAR Lawsuit
In March 2024, NAR and plaintiffs reached a proposed settlement to resolve claims regarding broker commissions on behalf of home sellers. This settlement is scheduled to take effect in August 2024.
Under the proposed terms, REALTOR® members serving as buyer agents will need to enter into written agreements with buyers before offering services such as property showings or submitting offers. Compensation for buyer agents will be clearly defined in these agreements, possibly based on a percentage of the sale or a fixed rate.
Impact of the Proposed NAR Lawsuit Settlement
Aside from increasing transparency around commissions and fees, the settlement might introduce changes that provide consumers with more options and foster a more equitable real estate market. For the latest information about the settlement, download this video, Do You Have What It Takes to Grow in Today’s Market?
Despite these developments, one constant requirement for aspiring brokers is obtaining a state-specific real estate license. Start your journey toward meeting these real estate licensing prerequisites in Washington by seeking guidance from Rockwell today.
