NAR Settlement in Sitzer/Burnett Case Approved by Court

The National Association of REALTORS®’ settlement resolving antitrust claims brought against NAR and others in the Sitzer/Burnett case has been granted final approval. The court heard from all parties as well as objectors and the Department of Justice. Once arguments concluded, the court quickly ruled to grant final approval. The court is expected to soon issue a formal written order.

NAR’s class-action settlement was granted court approval Tuesday, securing a release of  liability for over 1.4 million NAR members, all state/territorial and local REALTOR® associations, REALTOR® multiple listing services (MLSs), NAR’s affiliate organizations and all brokerages with an NAR member as principal that had a residential transaction volume in 2022 of $2 billion or below. The settlement also releases MLSs and brokerages that chose to opt-in to the agreement.  

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Veterans Affairs Signals Temporary Suspension of Buyer Agent Payment Ban

The Department of Veterans Affairs plans to temporarily lift its ban on buyers directly paying for professional real estate representation until the agency deems it necessary to engage in a formal rulemaking process, a VA official said Tuesday at a Mortgage Bankers Association conference in New York.

Although not an official announcement, the comments from VA Deputy Director of Policy Michelle Corridon were met with relief from the real estate industry, as the VA’s home loan guaranty is the only loan program with this explicit prohibition. Veteran buyers have limited options in situations where the listing broker makes no offer of compensation to the buyer  broker, potentially leaving veterans without professional representation or forcing them to switch to less favorable loan products. Click here to read more.

Rule Changes effective as of August 17, 2024

Under the NAR Settlement Agreement, practice changes result in revisions to the MLS policy handbook which are summarized below. The revised policies went into effect on August 17, 2024.

Our settlement requires NAR to implement the practice changes no later than the date of class notice. Through the preliminary settlement approval process, we now know the earliest date of class notice is August 17, 2024. 

MLSs that have opted into the settlement agreement have until September 16, 2024 to implement the necessary policy changes and to be considered released parties, as provided in the relevant appendices they executed. However, NAR’s accelerated rule change process gives MLSs three months to adapt. In accordance with mandatory NAR policy, REALTOR® MLSs must have implemented the practice changes by August 17, 2024. NAR recommends all opting-in MLSs implement the practice changes by this date.

Our FAQ has been updated to reflect the effective date and provide additional detail on implementation. We are committed to working together to navigate these adjustments and providing as much guidance to our members as possible. As further details emerge, additional materials will be shared and posted to facts.realtor.

Highlights

As part of the settlement, NAR has agreed to make substantive rule changes for cooperating compensation for transactions as of August 2024. Although cooperating compensation is still permitted by Minnesota law, MLS, and NAR rules, how this compensation is communicated and secured will change. There will no longer be a field for offers of compensation from one broker to another on the MLS. Further, blanket offers of cooperating compensation from one broker to another will not be allowed in any field on the MLS.   

Therefore, offers of cooperating compensation will need to be conveyed through another medium. There is still a potential for a “Seller Paid Concession” field to be displayed on the MLS, but it’s not required by the settlement agreement and would not be consider binding on parties to a transaction unless included in a subsequent written agreement between parties. Further, the seller would not be able to condition the “Seller Paid Concession” on the buyer based on whether they were being represented by another agent.  

Also, the agreement requires Realtors® to enter into a written agreement with buyers before showing them any properties. Again, in Minnesota we have been requiring signed buyer representation agreements on residential transactions for 30 years, but the new rule will emphasize the timing of securing these agreements. This may require a change in how some brokers handle buyer representation along with changes to MNR contracts for facilitation and exclusive or non-exclusive representation.