NAR reaches $418 million deal to settle commissions lawsuits 

The National Association of Realtors announced this morning that it has reached an agreement to end its lengthy and costly fight with home sellers who have claimed the organization is at the center of a conspiracy to inflate commissions and unfairly force sellers to compensate buyers agents. 

The settlement would leave HomeServices of America as the sole defendant in the Sitzer/Burnett case.

What are the terms? In announcing the settlement, NAR said it will pay $418 million over the next four years to end litigation.

The settlement — which is still subject to court approval — is broad in scope, resolving claims against:

• NAR 

• All state and local Realtor associations

• All association-owned MLSs

• Brokerage firms that have an NAR member as a principal and had sales volume below $2 billion in 2022

• More than a million NAR members, including agents and brokers

NAR emphasized, however, that it "continues to deny any wrongdoing" in relation to the industry standard practice of cooperative commission splits between a seller's agent and a buyer's agent.

The deal also adds a new rule "prohibiting offers of broker compensation on the MLS" (emphasis added by NAR).

NAR said it had worked to include HomeServices of America, now the only remaining brokerage defendant in the Sitzer/Burnett case, in the settlement, but the company was ultimately not a part of the agreement. 

What did NAR say? NAR's interim CEO Nykia Wright said the settlement was the best solution for consumers and real estate industry professionals alike. 

"NAR has worked hard for years to resolve this litigation in a manner that benefits our members and American consumers," she said. "It has always been our goal to preserve consumer choice and protect our members to the greatest extent possible. This settlement achieves both of those goals."

"Ultimately, continuing to litigate would have hurt members and their small businesses," Wright also said. "While there could be no perfect outcome, this agreement is the best outcome we could achieve in the circumstances. It provides a path forward for our industry, which makes up nearly one fifth of the American economy, and NAR."

NAR said a major achievement in the settlement is retaining consumers' choice to utilize cooperative compensation when buying or selling a house. NAR is instituting a new rule that prohibits communication about or offers of broker compensation on or within the MLS system. However, compensation can still be negotiated by a consumer and agent directly. 

On cooperative compensation, NAR said that the practice helps "make professional representation more accessible, decrease costs for home buyers to secure these services, increase fair housing opportunities, and increase the potential buyer pool for sellers."