NAR strikes landmark deal spelling end of 6% commissions

Antitrust settlement includes $418M payment

NAR Resolves Commission Lawsuits
National Association of Realtors' Nykia Wright and Kevin Sears (NAR, Getty)

The National Association of Realtors is settling the antitrust lawsuits over broker commissions. 

The trade group agreed to pay $418 million in damages over four years to resolve claims against the organization, its members, all state and local Realtor associations and all association-owned multiple listing services, according to a press release. 

The agreement, which is subject to a judge’s approval, also extends to brokerages with NAR as a principal member that had a 2022 residential transaction volume of $2 billion or below. 

“Ultimately, continuing to litigate would have hurt members and their small businesses,” interim CEO Nykia Wright said in the press release. “While there could be no perfect outcome, this agreement is the best outcome we could achieve in the circumstances.”

NAR also agreed to change some of its policies, including guidelines for broker compensation that were cited by homesellers in the slew of lawsuits centered on its participation rule. The organization will bar listing brokers from making any offers of compensation on the MLS. It will also require buyers’ brokers to disclose their expected commission and their provided services in written agreements. 

The new rules will take effect in July. 

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The organization denied any wrongdoing and defended its commission sharing policies. NAR claims the rules were introduced in the 1990s in response to demands for enhanced consumer protection and representation. 

The deal to resolve the lawsuits does not include agents affiliated with NAR’s fellow Sitzer-Burnett defendant HomeServices of America, or other entities still named in the cases.

“While the settlement comes at a significant cost, we believe the benefits it will provide to our industry are worth that cost,” NAR President Kevin Sears said in the release. 

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NAR’s agreement comes nearly five months after a Kansas City jury ruled against the group and two major brokerages in the Sitzer/Burnett case, the first of the broker commissions lawsuits to head to trial. The verdict, which is still awaiting approval from the judge, included $1.8 billion in damages. 

Anywhere Real Estate and RE/MAX were also named as defendants in the lawsuit, but the firms both agreed to settle for a combined $139 million before the trial began in October. Keller Williams last month announced its own agreement to pay $70 million

NAR is also facing scrutiny from the Department of Justice, which is appealing to reopen its probe into the trade group after a lower court rejected its request last year. The agency in 2021 withdrew from a settlement agreement reached under the Trump Administration. 

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