Oct 163 min read

Real Estate News | NAR Lawsuit Isn't Over

The recent webinar hosted by "The Update" offered an important reality check for real estate agents who may not fully understand the current state of the National Association of Realtors (NAR) lawsuit regarding buyer agent commissions. The discussion, featuring insights from experts Tristan Ahumada, Saul Klein, and John Reilly, emphasized that the NAR lawsuit is far from over. Here’s what you need to know as the industry awaits the final ruling, and why the Department of Justice (DOJ) could still play a pivotal role.

The NAR Lawsuit: Not Finalized Yet

Many agents might assume that the legal battle over buyer agent commissions has already been settled, but that’s not the case. While the settlement has received preliminary approval, the final ruling won’t be made until November 26, 2024. Until then, the settlement remains in a "proposed" state, and several factors could still influence its outcome.

The preliminary approval essentially means that, for now, class members—such as real estate agents and brokerages—are temporarily restricted from pursuing further litigation against NAR regarding the issues covered by the lawsuit. However, this does not equate to a finalized agreement. The settlement terms, especially those involving commission practices, may still undergo significant changes based on upcoming legal developments.

DOJ’s Potential Intervention: What Could Happen?

John Reilly’s recent article on "The Data Advocate" highlighted speculation around a potential DOJ intervention in the coming weeks, potentially before the end of October. This idea was further explored during the webinar, where Reilly suggested that signals from the DOJ, such as statements and legal filings, point to a likely move before the election.

The DOJ has been actively involved in scrutinizing real estate commission practices for years, challenging policies that could be seen as anti-competitive. If the DOJ intervenes, they could recommend additional changes to the settlement or ask the judge to impose new conditions, particularly around how buyer-broker commissions are structured and disclosed.

Foreknowledge of Seller's Willingness to Pay Buyer Agent Commissions

During the webinar, Saul Klein discussed some common, yet controversial, practices used by agents to signal a seller's willingness to pay buyer agent commissions. For example, agents might leave notes in lockboxes or contact listing agents to convey commission details informally. Klein pointed out that these tactics are frowned upon by the DOJ because they could circumvent the goal of increasing transparency and competition in the marketplace.

The DOJ’s focus has been on eliminating practices that might reinforce old commission structures, potentially limiting consumer choice and inflating costs for both buyers and sellers. This adds to the possibility that the DOJ could intervene to push for more stringent rules against these kinds of behaviors.

Watch the Recorded Webinar Below

What Does This Mean for Real Estate Agents?

The key takeaway is that the lawsuit isn’t over, and there’s a high probability that changes are still on the horizon. Real estate professionals need to stay informed and be prepared for potential shifts in the industry’s regulatory landscape. Any DOJ intervention could lead to significant alterations in how commissions are negotiated and disclosed, impacting day-to-day business practices.

It’s crucial for agents to stay updated on the developments leading up to November 26th. While the aim here isn’t to cause alarm, agents should be aware that the DOJ’s involvement might introduce changes that could reshape the industry’s future.

Stay Informed: Watch the Webinar and Subscribe to "The Update"

To get a deeper understanding of the ongoing lawsuit and what’s at stake, be sure to watch the recorded webinar by "The Update." The discussion provides valuable insights into the complexities of the lawsuit and the possible implications for real estate agents across the country.

Moreover, stay ahead of industry news by subscribing to "The Data Advocate" on YouTube and following Real Estate Daily Magazine. These resources will keep you informed about critical changes in the real estate market and help you navigate any upcoming shifts with confidence.

Watch the webinar, stay informed, and be prepared for the changes that may be coming. Keep up with "The Update" and Real Estate Daily Magazine to ensure you’re always on top of the latest real estate news.