NAR Proposed Settlement Agreement Summary by Tricia Wachsmann, Esq.

(This summary is for general information and educational purposes only. This summary is not to be construed as a legal opinion or as legal advice)

Allegation:

Plaintiffs allege that the National Association of REALTORS® participated in a conspiracy to
raise, fix, maintain, or stabilize real estate commissions in violation of Section 1 of the Sherman
Act and corresponding state laws

Settlement:

NAR will pay $418 million (+ interest) in four annual installments – for the benefit of home sellers
across the United States

NAR will pay $3 million toward settlement notices
(this is in addition to the $208.5 million settlement w/ defendants Anywhere Real Estate, ReMax,
and Keller Williams)

Who is Released

1. NAR

2. over one million NAR members except for

a. agents affiliated with HomeServices of America (and affiliated companies)

b. remaining corporate defendants

3. all state/territorial and local REALTOR® associations

4. all association-owned MLSs
a. other MLSs can obtain release by opting into the practice changes and paying to
Settlement fund

5. all brokerages with an NAR member as principal that had a residential transaction volume
in 2022 of $2 billion or below

a. if volume for the brokerage as of 2022 exceeds 2 billion – can still obtain a release
pursuant to the Agreement

MLS covered in action:

1. The Bright MLS (including the metropolitan areas of Baltimore, Maryland; Philadelphia,
Pennsylvania; Richmond, Virginia; Washington, D.C.);

2. My Florida Regional MLS (including the metropolitan areas of Tampa, Orlando, and
Sarasota);

3. The five MLSs in the Mid-West that cover the following metropolitan areas: Cleveland,
Ohio; Columbus, Ohio; Detroit, Michigan; Milwaukee, Wisconsin; Minneapolis,
Minnesota;

4. The six MLSs in the Southwest that cover the following metropolitan areas: Austin, Texas;
Dallas, Texas; Houston, Texas; Las Vegas, Nevada; Phoenix, Arizona; San Antonio Texas;

5. The three MLSs in the Mountain West that cover the following metropolitan areas:
Colorado Springs, Colorado; Denver, Colorado; Salt Lake City, Utah;

6. The four MLSs in the Southeast that cover the following metropolitan areas: Fort Myers,
Florida; Miami, Florida; Charlotte, North Carolina; and Raleigh, North Carolina.

Practice Changes: (upon court approval to become effective mid-July)

1. eliminate and prohibit any requirement by the National Association of REALTORS®,
REALTOR® MLSs, or Member Boards that listing brokers or sellers must make offers
of compensation to buyer brokers or other buyer representatives (either directly or
through buyers), and eliminate and prohibit any requirement that such offers, if made,
must be blanket, unconditional, or unilateral;

2. prohibit REALTOR® MLS Participants, subscribers, other real estate brokers, other real
estate agents, and their sellers from

a. making offers of compensation on the MLS to buyer brokers or other buyer
representatives (either directly or through buyers) or

b. disclosing on the MLS listing broker compensation or total broker
compensation (i.e., the combined compensation to both listing brokers and
cooperating brokers);

3. require REALTOR® MLSs to

a. eliminate all broker compensation fields on the MLS and

b. prohibit the sharing of the offers of compensation to buyer brokers or other
buyer representatives described in Paragraphs 58(i) and (ii) of this Settlement
Agreement via any other REALTOR® MLS field;

4. eliminate and prohibit any requirements conditioning participation or membership
in a REALTOR® MLS on offering or accepting offers of compensation to buyer brokers
or other buyer representatives;

5. agree not to create, facilitate, or support any non-MLS mechanism (including by
providing listing information to an internet aggregators’ website for such purpose) for
listing brokers or sellers to make offers of compensation to buyer brokers or other
buyer representatives (either directly or through buyers),
however, this provision is not violated by:

a. a REALTOR® MLS providing data or data feeds to a REALTOR®, REALTOR®
MLS Participant, or third party unless the REALTOR® MLS knows those data or
data feeds are being used directly or indirectly to establish or maintain a platform
for offers of compensation from multiple brokers (i.e., the REALTOR® MLS
cannot intentionally circumvent this requirement); or

b. a REALTOR® or REALTOR® MLS Participant displaying both (1) data or data
feeds from a REALTOR® MLS and (2) offers of compensation to buyer brokers or
other buyer representatives but only on listings from their own brokerage;

6. unless inconsistent with state or federal law or regulation before or during the operation
of this Paragraph 58(vi) of this Settlement Agreement, require that all REALTOR® MLS
Participants working with a buyer enter into a written agreement before the buyer
tours any home with the following:

a. to the extent that such a REAL TOR® or Participant will receive compensation
from any source, the agreement must specify and conspicuously disclose the
amount or rate of compensation it will receive or how this amount will be
determined;

b. the amount of compensation reflected must be objectively ascertainable and
may not be open-ended (e.g., “buyer broker compensation shall be whatever
amount the seller is offering to the buyer”);

c. such a REALTOR® or Participant may not receive compensation for brokerage
services from any source that exceeds the amount or rate agreed to in the
agreement with the buyer;

 

7. prohibit REALTORS® and REALTOR® MLS Participants from representing to a
client or customer that their brokerage services are free or available at no cost to their
clients, unless they will receive no financial compensation from any source for those
services;

8. require REALTORS® and REALTOR® MLS Participants acting for sellers to
conspicuously disclose to sellers and obtain seller approval for any payment or offer
of payment that the listing broker or seller will make to another broker, agent, or
other representative (e.g., a real estate attorney) acting for buyers; and such disclosure
must be in writing, provided in advance of any payment or agreement to pay to another
broker acting for buyers, and specify the amount or rate of any such payment;

9. require REALTORS® and REALTOR® MLS Participants to disclose to prospective
sellers and buyers in conspicuous language that broker commissions are not set by
law and are fully negotiable
a. in their listing agreement if it is not a government-specified form,
b. in their agreement with buyers if it is not a government-specified form, and
c. in pre-closing disclosure documents if there are any and they are not governmentspecified forms.
In the event that the listing agreement, buyer representation agreement, or preclosing disclosure documents are a government form, then REALTORS® and
REALTOR® MLS Participants must include a disclosure with conspicuous
language expressly stating that broker commissions are not set by law and are fully
negotiable. NAR also shall require that REALTOR® Member Boards and
REALTOR® MLSs, to the extent they publish form listing agreements, buyer
representation agreements, and pre-closing disclosure documents for use by REAL
TORS®, Participants, and/or subscribers, must conform those documents to this
Paragraph 58(ix).

10. require that REALTORS® and REALTOR® MLS Participants and subscribers must not
filter out or restrict MLS listings communicated to their customers or clients based
on the existence or level of compensation offered to the buyer broker or other buyer
representative assisting the buyer;

11. rescind or modify any existing rules that are inconsistent with the practice changes
reflected in this Settlement Agreement; and
12. develop educational materials that reflect and are consistent with each provision in
these practice changes, and eliminate educational materials, if any, that are contrary to it.