NAR Settlement Update
The National Association of Realtors (NAR) is the overseeing body of all Realtors within the United States. In the past couple of months, a lawsuit has been brought against the NAR and major brokerages that could change the way properties are bought and sold. The allegations in question were that Realtors were price fixing and requiring sellers to pay for the buyer's agent commission fees. The lawsuit named four MLS systems through out the country. The NAR has come to a settlement with the plaintiffs and the purpose of this article is to give an update of that settlement.
The case has been working its way through the legal system for the past five years starting in 2019. The NAR came to an agreement on May 15, 2024 with the plaintiffs. The key objective of this settlement is to increase the communication between Realtors and members of the contract within a real estate transaction and ensure that all parts of the contract are fully understood. The financial implications for the NAR that were agreed upon in this settlement were $418 million to be paid over the next four years.
In the state of Montana, the real estate industry will not change much. The contracts that are in place in the state of Montana disclose to the seller that part of the commission fee paid will be used to pay the buyer's agent commission fee. Currently, the seller generally pays the buyer’s agent commission and we recommend that sellers continue to do this. By paying a buyer’s agent commission, the seller will increase the pool of buyers that are eligible to submit an offer. In other states, the real estate industry is more likely to change more dramatically. Especially, if those states did not previously have similar language in their contracts to that of Montanas.
