The new rules are the result of a major antitrust settlement with the National Association of Realtors. They’re poised to change how agents are compensated and how real estate consumers search for homes.
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Five months after the National Association of Realtors agreed to a landmark antitrust settlement, the rules resulting from the settlement finally take effect today.
These rules will determine how agents are paid and how consumers search for homes. In the former case, home sellers and their agents will no longer be able to offer commissions to buyers’ agents in the NAR-affiliated Multiple Listing Service. In the latter case, homebuyers will need to sign an agreement with the agent before starting to tour the home.
Read Brad Inman’s thoughts on this historic day
Other rules require brokers to disclose that commissions are negotiable and prohibit the MLS from helping the seller’s agent provide compensation through any non-MLS mechanism. Inman documents the rule changes in full here .
The settlement and resulting rules stem from a story in 2019, when multiple home sellers sued over commissions they had to pay to buyer’s agents. The lawsuits allege that the National Association of Realtors and various major franchisees conspired to maintain high commissions and consumer costs. Plaintiffs in these cases argue that the alleged conspiracy violated the Sherman Antitrust Act and other laws.
The situation finally came to a head in October 2023, when one of the cases, named Sitzer|Burnett, went to trial. The jury ultimately found that NAR and the other defendants conspired.
The jury’s verdict has two effects. First, a large number of copycat cases began to appear across the country. Some of the cases name the same defendants, but many also identify other companies, MLSs and REALTORS associations as alleged co-conspirators.
Second, settlements became the norm. The first settlement involving Anywhere and RE/MAX actually preceded the October Sitzer | Burnett trial. But in the following months, pilot companies including Keller Williams, Compass, Redfin and others also finalized their own settlement plans. Typically, these settlements involve monetary payments and agreements to change business practices.
However, the settlement announced by NAR in mid-March shocked the real estate industry and triggered the most sweeping changes. In the months that followed, the settlement also sparked a massive and unresolved debate in the industry over how big an impact it would all have.
For example, Compass CEO Robert Reffkin recently observed that, in some cases, some changes have been rolled out this summer, but business is mostly continuing as usual. Others, however, believe the new status quo could have a range of significant impacts, including reducing agent tiers, lowering commissions or changing homebuyer affordability (either in a positive or negative way).
Many other questions also remain unanswered. Can NAR maintain its strong position in the industry? Are buyers willing to pay an agent? Will the U.S. Department of Justice push for bigger changes?
Only time will tell, but for now, one thing is certain: August 17, the day the new rules come into effect, will go down in history.
The following resources can help you navigate the new industry landscape:
Leader’s comments:
Practical advice from experts and industry insiders:
Key Moments and History:
Initial impacts and early signals:
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