A powerful real estate trade association agreed to pay $418 million and change its rules to settle lawsuits alleging that homeowners have been unfairly forced to pay artificially inflated agent commissions when selling their homes.
The National Association of Realtors said Friday that its agents listing a home on a Multiple Listing Service, or MLS, will no longer be able to use the service to offer to pay a commission to agents representing potential homebuyers. However, the rule change leaves individual home sellers free to negotiate such offers with a buyer’s agent outside MLS platforms.
The NAR also agreed to create a rule requiring MLS agents or other participants working with a homebuyer to enter into a written agreement with them. The measure aims to ensure homebuyers know how much their agent’s service will charge them for their services.
The rule changes, which will take effect in mid-July, represent a major shift in how real estate agents operate.
The NAR faced multiple lawsuits over how agent commissions are set. In October, a federal jury in Missouri found that the NAR and several large real estate brokerages conspired to require home sellers to pay a buyer’s agent commission, in violation of federal antitrust law.
The jury ordered the defendants to pay nearly $1.8 billion in damages, and potentially more than $5 billion if the court ultimately awards plaintiffs triple damages.
The NAR said the settlement covers more than one million of its members, its affiliated Multiple Listing Services, and all brokerages with a NAR member as principal that had a residential transaction volume in 2022 of $2 billion or less.
The settlement, which is subject to court approval, does not include real estate agents affiliated with HomeServices of America and its related companies, the NAR said.
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