What You Should Know About The National Association of Realtors (NAR) Settlement
In 2019, a class action lawsuit was filed against the National Association of Realtors (NAR) and other national brokerage firms alleging that NAR’s rule (which required brokers to advertise on the Multiple Listing Service (MLS) that a seller would compensate the buyer’s agent) was a violation of antitrust laws and had artificially inflated agent commissions. A settlement in this case has been reached and went into effect on August 17, 2024. The settlement requires NAR and other brokerages to pay $418 million to eligible class members and prohibits advertisements on MLS of agent compensation. Now, MLS participants (buyer’s agents) must enter into a written agreement with the buyer/ potential buyer regarding agent compensation before touring the home.
How do I know if I am entitled to payment under the settlement?
The settlement website states that you an eligible class member who can file a claim for compensation if:
- You sold a home on MLS in Wisconsin between October 31, 2017 – July 23, 2024[1], and
- Paid a commission to a real estate agent/broker in connection with the sale.
Claims must be filed by May 9, 2025, by visiting the settlement website, www.realestatecommissionlitigation.com.
How does the NAR Settlement Affect Wisconsin?
The historical practice of sellers compensating buyer’s agents has been called into question in the wake of the media headlines associated with the lawsuit, which claim, among other things, that buyers may end up paying more. How buyer’s agency agreements will affect the real estate market is uncertain, but it may be comforting to know a few things:
- The standardized offer forms (WB forms) Wisconsin uses for real estate transactions have been recently updated to include a provision for seller compensation to the buyer’s agent.
- Buyers’ agency agreements can be flexible – the term of the agreement may be for just a few days, just for the showing, a flat fee, etc. Buyers should make sure to read the agency agreements, as they are likely to differ.
- The rules do not affect the rights of both buyers and sellers to negotiate. Rather, the new rules will likely make negotiations clearer and more transparent.
[1] (realestatecommissionlitigation.com)
Contact us today for a consultation at 262-725-0175 or our website’s contact page. Wynn at Law, LLC is based in Southern Wisconsin and has three office locations: Lake Geneva, Delavan, and Salem.
