“Ultimately, continuing to litigate will harm our members and their small businesses,” said Nikia Wright, NAR's interim CEO. “No outcome is perfect, but this agreement is the best we can achieve under the circumstances.”
If a federal court approves the settlement, the new rules will go into effect in July, said a person close to the settlement negotiations, speaking on condition of anonymity.
Plaintiff attorney Michael Ketchmark, who represents Missouri home sellers in one of the lawsuits, believes the agreement will fundamentally change the real estate market and reduce the cost of selling homes and homes. He said there was.
“There's no doubt in my mind that this is going to result in significant savings for homeowners,” he says.
The Realtor Association's 100-year-old commission structure dictated that the seller and buyer's agents split the amount, typically in the range of 5 to 6 percent of the home sale price. Home sellers in Illinois and Missouri are suing NAR in two class action lawsuits that require sellers' agents to offer non-negotiable compensation in order to be listed on the Multiple Listing Service, a home sales database. They argued that the rules artificially inflate fees.
In October, a jury ruled in favor of the Missouri plaintiffs, awarding them $1.8 billion in damages. The Illinois case was heading to trial. Ketchmark, who represents the Missouri plaintiffs, said the agreement announced Friday, if approved by a judge, would resolve those cases and end the long-standing commission structure. He said it would be.
Since the October ruling, experts had predicted that the commission system was poised for change. In addition to being threatened with a class action lawsuit, the Department of Justice had asked the U.S. Court of Appeals for the District of Columbia Circuit to reopen an antitrust investigation into NAR's commission rules that were settled in 2020.
Aaron Gregg contributed to this report.
