A settlement between the National Association of Realtors and a group of homebuyers who sued the powerful trade group received a final green light on Tuesday.
Judge Stephen Bough of the Western District of Missouri granted final approval to the commission settlement agreement the trade group initially agreed to eight months prior.
In March, NAR said it would pay $418 million to settle claims and change some of its commission rules, which plaintiffs argued inflated costs for them.
The association said it will prohibit offers of compensation to be made on Multiple Listing Services and mandate written agreements between Realtors and clients. NAR said it would mandate written agreements between Realtors and home purchasers and prohibit offers of compensation from being made on a multiple listing service. The rules went into effect on Aug. 17.
Kevin Sears, president of NAR, said this is an important moment for the real estate industry, including NAR members, homebuyers, and sellers.”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,” Sears wrote in a statement Tuesday. “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.”
The green light was given despite a last minute filing by the Department of Justice, which raised antitrust concerns.
“The new provision that requires buyers and brokers to make written agreements before home tours may harm buyers and limit how brokers compete for clients. It bears a close resemblance to prior restrictions among competitors that courts have found to violate the antitrust laws in other proceedings and could limit — rather than enhance — competition for buyers among buyer brokers,” the DOJ said in its filing.
The department also made it clear that the settlement would not prevent it from taking action in the future if warranted.
Despite the closing of this chapter, a series of unwanted headlines — including a recent New York Times investigation that featured critics questioning the salaries of the trade group’s top executives and former officers with dubious current ties to NAR — raises lingering questions whether this will impact the trade group going forward.
Coming on the heels of the highly publicized settlement, which itself followed a leadership shakeup in 2023 after a sexual misconduct scandal, the investigation might be considered the third leg of a “trifecta” that stands to further erode trust in the group among dues-paying members, mortgage industry stakeholders previously said.
