Written by Emily Koelsch
On March 15, 2024, the National Association of Realtors (NAR) reached a landmark settlement in a pending lawsuit over real estate commissions. The lawsuit was brought by a group of home sellers who challenged how NAR and real estate brokerages set commission rates.
Here’s an overview of the lawsuit, details about the settlement, and a look at the shifts expected from this industry-changing litigation.
In 2019, a group of home sellers in Missouri filed a lawsuit against NAR and several brokerages claiming that they conspired to keep real estate commissions high and to force sellers to pay the commission of the buyer’s agents.
In October 2023, a federal jury ruled in favor of the home sellers and ordered the defendants to pay nearly $1.8 billion in damages. NAR initially said it would appeal the verdict, a process that would take years. In a surprising shift, however, NAR agreed to settle the case in March.
In its settlement, NAR agreed to pay $418 million in damages and, notably, agreed to changes in the rules governing the home selling and buying process.
Here’s a look at the most notable rule changes from the settlement:
The changes will go into effect in July, pending court approval.
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While these changes should officially go into effect in July, there likely will be some lag time before they cause major shifts in the industry. Even so, this settlement promises to change how people buy and sell houses.
Broadly speaking, the settlement should lead to:
Some additional changes that we’d expect to see over time are:
All in all, we think big changes are ahead for home buyers and sellers. These changes should lead to reduced transaction costs for investors and more options when buying and selling properties.
It will take some time to see the full effects of the settlement, but it’s safe to say this is the biggest change for the real estate industry in decades. To stay up-to-date with any changes or additional real estate news, visit ezLandlordForms.com.
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