NAR, HomeServices prepare to close the chapter on litigation 

After more than five years of clashing with home sellers in the courts, the National Association of Realtors and HomeServices of America are ready to move on from litigation over agent commission practices.

On November 26, U.S. District Court Judge Stephen Bough is expected to give final approval to the settlements reached separately by NAR and HomeServices in the Sitzer/Burnett case, which represent about 70% of the more than $1 billion settlement fund. 

After the plaintiffs' attorneys take their share — a whopping one third of the pot — the remainder will be divided up among the class of home sellers across the country who opted into the settlement.

Is this really the end? 

Several copycat cases are still making their way through the courts, and more lawsuits and appeals are possible, but with new policies in place since August, the vibe in the industry seems to be "let's move forward" — a sentiment predicted by NAR President Kevin Sears soon after the deal was announced: "It's a good thing for us, because if the judge approves it in roughly six months or so, then it means it's behind us."

It's now been more than eight months, and NAR certainly seems ready to close this chapter. In a Nov. 21 filing in support of the upcoming hearing, the association said the agreement "reflects years of hard-fought litigation and the realities of what would happen if the parties continued to fight."

"While the settlement was not what NAR wanted, it was the only path guaranteed to avoid a catastrophic outcome," the filing stated. 

A forced shift for the industry

So what did NAR want? To maintain the status quo and keep decades-old practices in place,  such as allowing listing agents to include offers of compensation on the MLS. In the weeks leading up to the Sitzer/Burnett trial, NAR defended its policies and argued that a loss in court could send the industry back to "the Wild West."

But the powerful association wasn't able to convince a Kansas City jury — which took less than three hours to reach its landmark verdict — and suffered a high-profile loss in U.S. District Court just over a year ago.

The jury agreed with the home sellers who claimed those NAR policies were responsible for keeping agent commission fees artificially inflated during a time when technology made it easier for people to find and sell homes. 

So far, however, commissions have remained relatively unchanged since practice changes took effect, though it's not yet clear what the future holds.

A hefty price to pay 

The plaintiffs said their goal was not to bankrupt the defendants, but to ensure they paid a significant price. And NAR's $418 million settlement is, indeed, significant. In its latest filing, the organization estimates it is paying more than 55% of its total assets into the fund. Sears, in a speech to members earlier this month, said, "So what does that look like? Well, we'll be leaner in how we operate," noting that NAR will continue to focus on cutting costs.

HomeServices of America, the last of the Sitzer/Burnett defendants to settle, is paying the second-highest amount of damages at $250 million. In a Nov. 20 filing, HomeServices attorneys said that amount "represented the uppermost limit of their ability to pay while still remaining financially viable." 

The other brokerage defendants in the case negotiated substantially smaller settlements, with Anywhere agreeing to pay $83.5 million, Keller Williams paying $70 million, and RE/MAX on the hook for $55 million.

Plaintiffs appear satisfied

The home sellers who brought the case also expressed their desire to finalize the settlement, with plaintiffs' attorneys detailing their thoughts and addressing objections throughout a 137-page document filed Nov. 20. 

They signaled their satisfaction with the monetary damages and said the reforms agreed to by NAR "will promote price competition and, over time, are expected to bring about meaningful benefits for consumers."

They also contend the settlement is widely popular among consumers, noting that more than 491,000 class members have filed claims so far, with only 39 opting out and 23 filing objections. The settlement website has received more than 12 million page views, plaintiffs said, and because sellers have until May 9, 2025, to submit a claim, the number of opt-ins will likely increase. 

Lawyers for the plaintiffs addressed each of the objections, which included criticisms of attorney fees, the scope of the damages and the class size, as well as concerns about lumping homebuyers who also sold homes in with the seller class.

In responding to the complaints, the plaintiffs acknowledged that the settlement resolves specific practices and that it "will not cure every ill in the entire real estate industry."

"The Settlement does, however, make important changes to how homes are bought and sold," they wrote in the filing. 

"It will take time for the full effect of these reforms to be felt. But the early evidence suggests that they are already resulting in a more competitive and consumer-friendly marketplace."