To our REALTOR® Members:
We wanted to take a second and share an update on what we know at this time re: the Department of Justice’s lawsuit against the National Association of REALTORS® on the basis that NAR has created rules that enforce illegal restraints on the way that REALTORS® compete.
“The Antitrust Division simultaneously filed a proposed settlement that requires NAR to repeal and modify its rules to provide greater transparency to home buyers about the commissions of brokers representing home buyers (buyer brokers), cease misrepresenting that buyer broker services are free, eliminate rules that prohibit filtering multiple listing services (MLS) listings based on the level of buyer broker commissions, and change its rules and policy which limit access to lockboxes to only NAR-affiliated real estate brokers. If approved, the settlement will enhance competition in the real estate market, resulting in more choice and better service for consumers.”
Read the DOJ release here
The National Association of REALTORS® was quick to respond to this and has agreed to settle this lawsuit and make changes to its rules to accommodate the DOJ.
Summary of Outcomes
In accordance with the MLS system's long-standing focus on creating an efficient, transparent marketplace for home buyers and sellers, the amount of compensation offered to buyers' agents for each MLS listing will be made publicly available. Publicly accessible MLS data feeds will include offers of compensation, and buyers' agents will have an affirmative obligation to provide such information to their clients for homes of interest.
Relatedly, the rule changes re-affirm that MLSs and brokerages, as always, must provide consumers all properties that fit their criteria regardless of compensation offered or the name of the listing brokerage.
While NAR has long encouraged buyers' agents to explain how they expect to be paid, typically through offers of cooperative compensation from sellers' agents, there will be a rule that more definitively states that buyers' agents cannot represent that their services are free to clients.
Finally, with the seller's prior approval, a licensed real estate agent will have access to the lockboxes of properties listed on an MLS even if the agent does not subscribe to the MLS.
What Happens Next
NAR will work with the DOJ to agree on exact rule changes within 45 days, then the NAR Board of Directors will have to approve the new rules. The Court overseeing the settlement must formally approve the agreement, at which point we anticipate that the new rules will take effect. NAR will keep all of its members and associations apprised of official rule changes as more details become available.
In entering this agreement with the DOJ, NAR admits no liability, wrongdoing or truth of any allegations by the DOJ. The agreement does not subject NAR to any fines or any payments.
You can see several FAQ’s on NAR’s website at this time. Information is limited as this news just broke and there will be a lot of work to be done in the meantime.
Rest assured will keep you posted as news becomes available. This news does not come as a surprise as the real estate industry continues to adapt for consumers and new business models are introduced to the marketplace. REALTORS®, as always, will have to be on top of their game to continue to show value to their clients and consumers like we know you do every day.
The recent National Association of REALTORS® survey of American homebuyers and sellers 88% of homebuyers and sellers used the services of a REALTOR®. Our industry still leads the way to finding the American Dream of homeownership. See the full report here.