Knowledge. Experience. Results.

NAR Agrees to $418 Million Settlement

A recent legal settlement has made waves in the real estate industry. The National Association of REALTORS (NAR) has agreed to pay out nearly $418 million over a four-year period, subject to court approval. While the NAR has admitted no wrongdoing, a spokesperson has stated that this is the best outcome that could have been achieved, given the circumstances.

The NAR’s commission rules for real estate agents were the subject of litigation. The proposed settlement has the potential to permanently change the way agents communicate with each other about commissions. Recently, the NAR has been the target of multiple lawsuits criticizing its compensation structure. Previously, a Missouri jury found the NAR liable for colluding to keep real estate agent commissions high. Fortunately for the NAR, the latest settlement frees its members from any liability in the $1.8 billion Missouri verdict.

The settlement will likely lead to significant changes. According to the settlement, realtors and buyers will now have to enter into a written agreement before a buyer can start touring homes. This contract must outline the amount or rate of the agent’s compensation. Sellers may continue to pay buyers commissions, or buyers may pay their own fees. Following the settlement, offers to pay the buyer’s agent will no longer be permitted on the Multiple Listing Service (MLS).

One question has been on everyone’s mind since the settlement. Will this really cause the commission to drop? Some have even speculated that home prices will drop since sellers will be saving money on commissions. Unfortunately, home prices are unlikely to drop because value is primarily dictated by the market[1]. However, the same may not be true for commissions. Economists are predicting commissions to drop by up to $30 billion a year. This drop in commissions is the result of increased competition between agents. Consumer advocates agree that the new settlement will make price fixing much more difficult. Now that buyers and sellers can negotiate rates, the process should also become more transparent. Only time will tell how much this settlement will really change the homebuying process.

A few aspects of the settlement are guaranteed though. The NAR must pay over $400 million throughout the next four years, and buyers and agents are now required to sign a contract before touring homes.

The attorneys at Strause Law Group, PLLC, are well-versed in handling disputes resulting from real estate transactions. We have represented realtors, buyers and sellers. Contact our office to schedule a consultation about your real estate dispute.

[1] Cerullo, Megan. “National Association of Realtors to Cut Commissions to Settle Lawsuits. Here’s the Financial Impact.” CBS News, CBS Interactive, 15 Mar. 2024,