The new rules are the result of the National Association of Realtors’ major antitrust settlement. They’re poised to change how agents are paid 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 that settlement finally go into effect today.
The rules will determine both how agents will get paid, and how consumers search for homes. In the former case, homesellers and their brokers will no longer be able to offer commissions to buyers’ brokers within NAR-affiliated multiple listing services. And in the latter case, homebuyers will need to have a signed agreement with their broker before they begin touring homes.
READ BRAD INMAN’S TAKE ON THE HISTORIC DAY
Other rules require brokers to disclose that commissions are negotiable, and bar MLSs from helping seller’s agents make offers of compensation via any non-MLS mechanism. Inman has a full write up of the rules changes here.
The settlement and resulting rules are the product of a story that began in 2019 when multiple homesellers sued over the commissions they had to pay to buyer’s agents. These lawsuits claimed that the National Association of Realtors and various major franchisors conspired to keep commissions, and costs to consumers, high. The plaintiffs in these cases believed that the alleged conspiracy violated the Sherman Antitrust Act, among other laws.
The situation finally came to a head in October 2023 when one of those cases, known as Sitzer | Burnett, went to trial. A jury ultimately agreed that NAR and the other defendants engaged in a conspiracy.
The jury verdict had two effects. First, a slew of copycat cases began cropping up all over the country. Some of these cases named the same defendants, but many also identified additional companies, MLSs and Realtor associations as alleged conspirators.
And second, settlements became the norm. The first settlements, involving Anywhere and RE/MAX, actually predate the October Sitzer | Burnett trial. But over the months following the trial companies including Keller Williams, Compass, Redfin and others all hashed out their own settlements as well. Typically, these settlements involved an agreement to both make monetary payments and to change business practices.
However, NAR’s settlement — which was announced in mid-March — was the one that rocked the real estate industry and led to the most sweeping changes. Over the ensuing months, the settlement has also led to a massive and still-unsettled debate in the industry over just how consequential all of this will be.
For instance, Compass CEO Robert Reffkin recently observed that changes had already rolled out over the summer in some cases but that business was mostly continuing as usual. Others, however, have argued that the new status quo could have an array of significant impacts including reducing agent ranks, driving down commissions, or changing the affordability equation (either in positive or negative ways) for homebuyers.
A bevy of other questions remain unanswered as well. Will NAR maintain its powerful position in the industry? Will buyers be willing to pay for agents? Will the U.S. Department of Justice push for even bigger changes?
Only time will tell, but for now, one thing is certain: Aug. 17, the day the new rules kick in, will go down in the history books.
Here are resources to help you navigate the new industry landscape:
Commentary from leaders:
Practical advice from experts and insiders:
Key moments and history:
Initial impacts and early signals:
Email Jim Dalrymple II
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