Landmark decision resolves class-action claims and introduces new transparency measures
The US District Court for the Western District of Missouri has approved a settlement proposed by the National Association of Realtors (NAR) to resolve a class-action lawsuit over broker commission practices.
The decision grants relief to over 1.4 million NAR members, associations, and brokerages, marking a pivotal moment for the real estate industry.
The settlement, which releases liability for eligible brokerages, Realtor® Multiple Listing Services (MLSs), and NAR affiliates, includes $418 million in payments over four years to a settlement fund. It also introduces practice changes aimed at increasing transparency and fair competition in real estate transactions. Membership dues for 2025 will remain unchanged from 2024.
Under the terms of the settlement, NAR members must adhere to updated business practices to maintain their released status. These changes, designed to address consumer concerns about compensation structures, emphasize the importance of negotiating services and fees tailored to individual needs.
The lawsuit and subsequent settlement come at a time when the real estate industry is under increasing scrutiny for its fee structures. While NAR members welcome the legal resolution, the changes signal a shift toward more consumer-focused practices that could redefine industry norms.
As realtors begin implementing the required adjustments, NAR has emphasized the importance of compliance to uphold the terms of the settlement.
“This is an important moment for NAR members, home buyers and sellers, and the real estate industry,” said NAR president Kevin Sears, broker-associate of Sears Real Estate/Lamacchia Realty in Massachusetts. “As consumer champions, NAR’s members have been working tirelessly to implement the practice changes required by the settlement and shepherd consumers through this period of transition. The principles of transparency, competition and choice are core to the settlement agreement and empower real estate professionals and consumers to negotiate the services and compensation that work for them.”
Read next: NAR settlement: How could it boost the mortgage industry?
“NAR is committed to empowering Realtors® to help home buyers and sellers successfully navigate what is often the most important financial transaction of their lives,” NAR chief executive Nykia Wright said in a press release. “Today and every day, NAR is focused on demonstrating the importance of agents who are Realtors® in the marketplace, creating a transparent and inclusive home buying and selling process, and advancing the right to real property for all.”
More details about the specific practice changes are available through NAR’s Settlement FAQs, offering guidance to members navigating the new landscape.
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