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Writer's pictureJackie C

Upcoming Changes Due to the NAR Settlement

Updated: Oct 1



The recent settlement involving the National Association of Realtors (NAR) is set to bring significant changes to the real estate industry. Here’s a brief overview of what the settlement was about, a timeline of events, and some insights into the coming changes.


What Was the Settlement About?

The NAR settlement revolves around accusations that the organization engaged in anti-competitive practices that affected the real estate market. Specifically, the lawsuit claimed that NAR’s policies inflated buyer agent commissions, leading to higher costs for homebuyers. The settlement aims to address these concerns by introducing new rules and transparency measures.

Timeline of Events

  • March 2019: The class-action lawsuit is filed, alleging that NAR’s rules violated antitrust laws by requiring sellers to pay buyer agents’ commissions .

  • October 2020: The U.S. Department of Justice (DOJ) launches an investigation into NAR’s practices, focusing on the same issues raised in the lawsuit .

  • November 2021: NAR agrees to a settlement with the DOJ, committing to several changes aimed at increasing transparency and competition in the real estate market .

  • June 2022: The settlement is approved by a federal court, setting the stage for the implementation of the agreed-upon changes .

  • January 2023: NAR begins the initial phase of implementing changes, including training for members on the new rules.

  • June 2023: Full transparency of commission rates becomes mandatory for all NAR members.

  • December 2023: The rule eliminating the requirement for sellers to pay buyer agent commissions goes into effect.

  • June 2024: Full implementation of all settlement terms, including enhanced access to property information for buyers.

  • August 17, 2024: Earliest date for Plaintiffs to issue class notice. Practice changes take effect.

  • September 16, 2024: REALTOR® MLSs and opting-in non-REALTOR® MLSs and brokerages must implement practice changes by this date.

  • Sometime in September 2024: Anticipated Motion in Support of Final Approval.

  • November 26 , 2024: Hearing for Final Approval.

Upcoming Changes

The settlement mandates several key changes that will impact how real estate transactions are conducted:

  1. Transparent Commission Rates: Real estate agents will be required to disclose their commission rates to their clients before showing any homes and all buyers will need to sign an agreement before touring any homes.

  2. No Buyer Commissions on MLS's: Buyer agent commissions will no longer be advertised on MLS databases. Instead, buyers and sellers will need to negotiate buyer agent commissions off-line.



Insights into the Coming Changes

These changes aim to create a more competitive and transparent real estate market. Buyers can see lower prices on homes due to the removal of commission payments on the MLS and they will be more informed on the way their agent's are getting paid due to the new disclosure rules. That said, Buyer's agents will still need to get paid, so in my opinion while these changes will increase transparency, they will also increase the number of negotiation points in a transaction.

For sellers, the new rules could mean adjustments in how they negotiate with buyers and agents. The focus will likely shift towards demonstrating the value and service provided by agents, as opposed to relying on set commission structures.



Resources

For more detailed information on the NAR settlement and its implications, you can refer to the following sources:


If you have any questions, send over a message.

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