The DOJ has spoken. Are buyer agreements at risk? 

With the shock of the DOJ's last-minute Statement of Interest about the NAR settlement still fresh, more than a few agents are wondering what to do about buyer agreements.

The filing late Sunday by the Department of Justice  — two days before the final settlement hearing for HomeServices of America and the National Association of Realtors — was not only startling to some in terms of timing, but also because the agency came out against such a pivotal component of the deal.

While taking no official position on the settlement's expected approval, the DOJ said having a policy where a buyer agent agreement must be signed before touring may harm buyers by limiting competition.

One solution could be to scrap it altogether, the agency suggested.

The buyer agreement rule changes — along with the removal of offers of compensation from multiple listing services — are the key components of the $418 million NAR settlement.

"This late filing is bizarre to me in the sense of them saying at the last minute you can change this core requirement of the NAR settlement," said Tanya Monestier, a law professor who filed an objection to the settlement. "If you now take away that part of the settlement, it sort of falls apart."

Settlement still on track for approval, but it hits different now

Even with the DOJ filing, U.S. District Court Judge Stephen Bough is expected to approve the final settlement without significant changes on Nov. 26. As the DOJ pointed out in its filing, it was not involved in the settlement, which was put together by private citizens and their attorneys.

This is a double-edged sword, however, as the DOJ requested that Bough make clear the settlement is not a shield from further litigation.

As industry observer Rob Hahn pointed out on the social media site X, this will put agents and brokerages in a difficult position: Either comply with the new rules and get buyer agent agreements completed ahead of tours — but risk getting sued by the DOJ — or don't follow the rule and be out of compliance.

So instead of the finality that usually comes with a court settlement, real estate professionals are facing more uncertainty. 

"I honestly feel sorry for companies, brokerages and institutions that just want to know what to do," Monestier said.

Stick with the rules, top brokerage leader says

For James Dwiggins, CEO of NextHome, the solution is clear: Continue to follow the settlement agreement once it has been finalized, and pay attention to the plaintiffs' interpretation of it.

"I don't care what your state association or your local association or the national association says otherwise, because at the end of the day, they (the plaintiffs) can sue you for anything they want, and the defense costs are astronomically expensive," Dwiggins said. "That's how the legal system operates."

But Dwiggins doesn't expect the DOJ to aggressively go after the industry for following the new policy. He said at least 16 states already had buyer agreement laws on the books, and he doesn't think the federal agency has much appetite to pursue what could turn into a states' rights issue.

"I think some of this is posturing. I think some of it is (the DOJ) trying to make sure that everybody understands that they have complete authority to sue everyone for antitrust violations," Dwiggins said.

The problem with workarounds

With the settlement still expected to be finalized, Monestier said one other area of confusion might be situations where agents try to get more than what's laid out in the agreement or look for other workarounds to the policy changes that went into effect Aug. 17.

A recent filing by the plaintiffs spelled out how they expect agents to handle commissions. For example, they specifically stated agents cannot renegotiate a higher commission amount or take bonuses above what's in their written agreement with buyers. Monestier noted other clarifications include a prohibition against ranges in compensation or property-specific agreements made after a seller's offer of compensation is known.

Dwiggins said he's been trying to get the message out about this for the past six months, but the industry has been slow to act. Attempts to get additional compensation are especially problematic.

"A mandatory buyer rep agreement being signed before you show any houses is designed to set your services and fee regardless of what the seller is offering or not. That's the point of it," Dwiggins said. "If you could (ask for more), then you could be incentivized to steer. Just don't do it."

If agents and brokerages continue to employ workarounds, Monestier believes they will face lawsuits. "I think all this stuff is going to come as a big surprise to the industry."