National Association of Realtors


A prominent real estate trade association has consented to abolish longstanding policies that have influenced agent commissions, aiming to resolve legal disputes alleging that these regulations have artificially inflated costs for home sellers. As part of the agreement announced on Friday, the National Association of Realtors (NAR) has also committed to paying $418 million to provide compensation to home sellers nationwide.

Home sellers involved in multiple lawsuits against the NAR and several major brokerages contended that the association’s regulations governing homes listed for sale on its affiliated Multiple Listing Services unfairly propped up agent commissions. These regulations also allegedly encouraged agents representing buyers to avoid showing their clients listings where the seller’s broker offered a lower commission to the buyer’s agent.

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In line with the settlement, the NAR has agreed to eliminate the requirement for a broker advertising a home for sale on MLS to provide upfront compensation to a buyer’s agent. This change allows individual home sellers to negotiate such offers with a buyer’s agent outside of MLS platforms, with the condition that the home seller’s broker discloses any compensation arrangements.

Furthermore, the trade group has committed to mandating that agents or others working with a homebuyer enter into a written agreement with them, ensuring transparency regarding the agent’s service charges.

These rule adjustments, scheduled to take effect in mid-July, signify a significant departure from the operational practices of real estate agents dating back to the 1990s and could lead to negotiations for lower agent commissions by homebuyers and sellers.

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Presently, agents working with both buyers and sellers typically split a commission of approximately 5% to 6% paid by the seller. However, the rule changes agreed upon by the NAR as part of the settlement might facilitate negotiations for lower agent commissions by homebuyers and sellers.

While these changes create opportunities for homebuyers to negotiate competitive rates for their agent’s services, they also necessitate home shoppers to consider how to cover their agent’s compensation. Homebuyers might still request concessions from home sellers to assist with the buyer’s agent compensation, although sellers, especially those with multiple offers, could decline such requests.

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The settlement resolves numerous lawsuits against the NAR regarding the setting of agent commissions, including a federal jury decision in Missouri in late October, which found the NAR and several large real estate brokerages guilty of conspiring to require home sellers to pay homebuyers’ agent commissions in violation of federal antitrust law. If approved by the court, the settlement will encompass over one million NAR members, its affiliated Multiple Listing Services, and brokerages with a NAR member as a principal that had a residential transaction volume of $2 billion or less in 2022.

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According to Nykia Wright, NAR’s interim CEO, pursuing further litigation would have been detrimental to members and their small businesses, making the settlement the most favorable outcome under the circumstances.

The settlement does not include real estate agents affiliated with HomeServices of America and its related companies. Additionally, Keller Williams Realty, Anywhere Real Estate Inc., and Re/Max have previously agreed to similar settlement terms in agent commission lawsuits.