On March 15, 2024, the National Association of Realtors announced an agreement that would end litigation of claims brought on behalf of home sellers related to broker commissions. This agreement would resolve any and all claims against the National Association of Realtors, all members of the National Association of Realtors, all state/territorial and local Realtor associations, any association owned by the Multiple Listing Services, and all brokerages with a National Association of Realtors member that had residential transaction volume in 2022 of $2 billion or below. Under the terms of the agreement, the National Association of Realtors would pay $418 million over approximately four years.
Two achievements of this resolution would be the release of most National Association of Realtors 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 National Association of Realtors also secured in the agreement a process for all brokerage entities that had a residential transaction volume in 2022 that exceeded $2 billion and the Multiple Listing Services not wholly owned by realtor associations to obtain releases efficiently if they choose to use it.
The National Association of Realtors fought hard to include all members in the release and was able to ensure more than one million members are included. Despite the efforts of the National Association of Realtors, agents affiliated with HomeServices of America and its related companies are not released under the settlement, nor are employees of the remaining corporate defendants named in the cases cover by the settlement.
In addition to the financial payment, the National Association of Realtors has agreed to put in place a new Multiple Listing Service rule that prohibits offers of broker compensation on the Multiple Listing Service. This means that offers of broker compensation could not be communicated via the Multiple Listing Service, but that they could continue to be an option consumer can pursue off of the Multiple Listing Service through negotiation and consultation with real estate professionals. Offers of the compensation help make professional representation more accessible, decrease costs for home buyers to secure these services, increase fair housing opportunities, and increase the potential buyer pool for sellers. They are also very consistent with the real estate laws in the many states that expressly authorize them.
Furthermore, the National Association of Realtors has agreed to enact a new rule that would require the Multiple Listing Service participants working with buyers to enter into written agreements with their buyers. The National Association of Realtors continues to encourage its members to use buyer brokerage agreements that would help consumers understand exactly what services and value will be provided and for how much. These changes will go into effect mid-July of 2024.
