In March 2024, a significant development occurred in the real estate industry involving the National Association of Realtors (NAR) and several major real estate brokerages. A landmark $418 million settlement was reached with NAR to resolve claims in four antitrust class actions. These class actions challenged the rules requiring home sellers to pay buyer broker fees in addition to their own broker’s commissions. This settlement is part of a larger series of settlements totaling $684.5 million, when including settlements with Anywhere Real Estate, RE/MAX, Keller Williams, and Compass ([Cohen Milstein](https://www.cohenmilstein.com)).
The lawsuits accused NAR and the nation’s largest residential real estate brokerage companies of conspiring to require home sellers to pay the broker representing the buyer, violating federal antitrust law. This alleged conspiracy revolved around NAR’s Buyer Broker Commission Rule, which mandated all brokers to make a non-negotiable offer of buyer broker compensation when listing a property on a Multiple Listing Service (MLS). This practice, plaintiffs argued, discouraged price competition among buyer brokers since the buyer, who doesn’t pay their commission directly, has no incentive to negotiate lower fees ([Cohen Milstein](https://www.cohenmilstein.com)).
The settlement also stipulates that NAR will pay the settlement amount over the next four years, with an additional $3 million towards settlement notices. Starting mid-July 2024, changes will be enacted where buyer-side brokers must enter into written agreements with their buyers, and broker compensation will no longer be displayed on MLS listings ([Top Class Actions](https://topclassactions.com)).
Additionally, Anywhere Real Estate agreed to separate settlements that involve rule changes over buyer’s agent commission and NAR membership. These changes include prohibiting claims that buyer’s agent services are free and requiring listing brokers to specify their offer of compensation in each listing. Furthermore, Anywhere will no longer mandate its brokers, franchisees, and agents to belong to NAR ([The Real Deal](https://therealdeal.com/national/2023/10/06/anywhere-proposed-rule-changes-in-commission-lawsuit-settlement/)).
These developments represent a significant shift in the real estate industry, impacting how commissions are negotiated and potentially leading to more transparency and competition in real estate services. Real estate professionals and home sellers should be aware of these changes, as they may affect the way real estate transactions are conducted in the future.
We, as REALTOR brokers in New Mexico, have always disclosed compensation in our Listing Agreements and Sellers have always had a choice in negotiating commissions. What your REALTOR broker charges is completely up to the individual Broker, so commissions have always been negotiable (since at least 1950). Commissions remain negotiable, as they have been.
There are, and always have been, various models of real estate services that a consumer can choose. It has always been up to you, as a consumer.
There are many nuances to this proposed Settlement that still need to be worked out, such as how a buyer who can’t afford to pay their broker, will qualify to purchase a home. Due to VA Loan restrictions, a buyer cannot pay commission, how will that be solved? If the buyer is restricted by cost from affording representation, what then? If the restriction is to not share a commission strategy in the Multiple Listing System, then we, as professionals, must have a platform and a process for doing so. Saavy sellers will always know the best marketing strategy and buyers will find a way to be best represented.
How a buyer broker is paid may change in our industry, but my services will never change. I will always keep you updated on the latest and best practices, and I’m dedicated to the real estate industry for years to come.
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