DOJ breaks silence to reject commission offers “anywhere”

Department could intervene in brokerage models that arise in wake of settlements

DOJ Breaks Silence, Doesn’t Want Commission Offers “Anywhere”
Attorney General Merrick Garland (Getty)

The Department of Justice broke its silence on commission practices in residential real estate as the National Association of Realtors awaits approval on its proposed $418 million settlement that hinges on compensation guidelines. 

The department weighed in during a status hearing for the Nosalek case out of Massachusetts, according to a status hearing first reported by RISMedia. It was the DOJ’s first public comment on the commissions issue since NAR reached its agreement with homeseller plaintiffs in mid-March, which included NAR removing offers of compensation from multiple listing services.

“We believe offers of compensation should not be made anywhere, but certainly not on the MLS,” said Jessica Leal, an attorney for the department, without commenting directly on the settlement agreement. 

The comment may signal that the regulator might choose to intervene if brokerages used listing agreements that gave sellers an opportunity to make offers of compensation: NextHome CEO James Dwiggins told Inman the update was a “shot across the bow.”

NAR’s changes are set to go into effect in August. The judge in the important Sitzer/Burnett case is set to consider approval of the settlement in November.

This week, NAR requested a rehearing in a case that will decide if the DOJ can reopen its investigation into the trade group’s Participation Rule, which has been at the center of the antitrust cases revolving around real estate commissions. 

The department last month received a green light to continue its investigation, which would require NAR to turn over documents and submit to depositions.

NAR and the DOJ settled the investigation in 2020, only for the latter to withdraw from the settlement in July 2021 under a new presidential administration. The two sides have since been squabbling over whether the probe into the trade group can resume.

“At the very least, all eyes are on the DOJ right now,” Dwiggins added.

Holden Walter-Warner

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