Recent headlines have spotlighted the lawsuit involving the National Association of REALTORS® (NAR) and its proposed settlement. If you’re considering a career in real estate, you may wonder how these developments could affect your future success in the industry. We understand your concerns – there’s a lot to unpack. Here’s a succinct summary of the court case and settlement for those interested in becoming real estate agents.
Please note: Allied Schools will be providing updates on this evolving situation through a series of blogs. Read Allied blogs for an in-depth analysis of the proposed NAR settlement and its implications for the industry.
Related content: Learn more about the NAR lawsuit and settlement through this informative webinar.
Key Takeaways:
- Recent news regarding the NAR lawsuit and proposed settlement has captured the attention of individuals considering a real estate career, raising questions about how it might impact future success in the field.
- The lawsuit, Burnett v. NAR, determined that NAR and certain brokerages were responsible for inflating buyer agent commission fees, particularly regarding the practice of advertising commissions to buyer agents via Multiple Listing Services (MLS). Critics argue this practice could influence agent priorities.
- The proposed settlement, expected to be effective in July 2024 pending court approval, seeks to enhance transparency in real estate transactions by requiring written buyer agreements that detail agent compensation, potentially changing how services are provided in the market.
NAR Lawsuit: Burnett v. NAR, et al. Verdict
On October 31, 2023, a federal jury in the U.S. District Court for the Western District of Missouri found the NAR and certain brokerages liable for artificially inflating buyer agent commission fees.
The lawsuit focused on the practice where seller agents advertise specific commissions to buyer agents via Multiple Listing Services (MLS). Critics argue this practice incentivizes buyer agents to favor properties with higher commissions.
In response, NAR stated, “NAR does not set commissions, which have been negotiable long before this settlement and will remain negotiable between brokers and their clients.”
Proposed Settlement of the NAR Lawsuit
In March 2024, NAR and plaintiffs reached a proposed settlement to resolve claims regarding broker commissions on behalf of home sellers. Pending court approval, this settlement is scheduled to take effect on July 1, 2024.
Under the proposed terms, REALTOR® members serving as buyer agents will need to enter into written agreements with buyers before offering services such as property showings or submitting offers. Compensation for buyer agents will be clearly defined in these agreements, possibly based on a percentage of the sale or a fixed rate.
Impact of the Proposed NAR Lawsuit Settlement
Besides increasing transparency around commissions and fees, the settlement might introduce changes that offer consumers more options and foster a more equitable real estate market. To understand these changes and their implications for new real estate agents, subscribe to the Allied Schools blog.
Despite these developments, one constant requirement for aspiring agents is obtaining a state-specific real estate license. Start your journey toward meeting these real estate licensing prerequisites in California by contacting Allied Schools today.
