My Response To The NAR Lawsuit

What’s Going On + My Thoughts…

I have read ton of articles, communications from NAR, MAR, SMAR, eXp, and I have watched hundreds of YouTube videos about the recent changes in the real estate brokerage industry.

I would like to address my past and future clients as well as the general public about this NAR (National Association Of Realtors) lawsuit. I will relay some details as I understand them and give my perspective as someone who has been in this business 15 years. *My summary is at the very end if you want to just skip ahead

The Lawsuit

I was recently told that if you have bought or sold a home in the past 5 years you have or will receive a postcard letting you know that you are part of a class action lawsuit. You will be receiving compensation as a result of a settlement (unless you go through the trouble of opting out.)

I am sure you have read the headlines that “6% commissions are dead FINALLY!” or have read something in the news that the real estate business is finally getting what they deserve.

We (Realtors) have recently received a communication from the National Association of Realtors letting us know that several changes are coming pending a judges approval. The lawsuits are not over and the settlements and changes are not final but many of the changes have been agreed to by both parties.

Do you care? Maybe or maybe not but if you are planning on buying or selling a house in the future, it will be different than it was in the past. If you are buying or selling in 2024, this is a MUST read.

I believe that this whole thing is unamerican. That’s a big statement and it sounds like it’s coming from a whiny Realtor who is getting their “over inflated” commissions taken away. Neither of those statements are true, hear me out.

How It Worked In The Past

First let me explain what happened and how all this works. I need to set up the context in order for you to make sense of this.

Starting in 1996 in Maryland, if a home seller hires a licensed Realtor:

  • A home seller calls a real estate agent and negotiates a commission to sell their house
  • They sign a listing agreement that spells out exactly how much the listing agent is paid
  • In a separate box on the listing agreement, it spells out how a buyer agent is paid in the event the buyer is represented by a buyers agent.
  • At settlement the seller pays the listing agent and if there was a buyers agent involved, there is a line item that shows that the seller is paying the buyers agent (out of the listing agents commission) the agreed to fee that was in the little box.

That’s what happens most of the time and that scenario (where the seller agrees to pay the listing agent and ends up paying the buyers agent some of that money) is the premise the DOJ and a class action attorney used, that led to a settlement by several real estate companies and NAR.

The lawsuit is not signed by a judge and the DOJ has not agreed to a settlement at this time however we expect the judge to agree to a new set of changes for how our industry does business.

The issue at hand was the fact that NAR and real estate companies were supposedly working together to keep commissions high and by requiring there to be a fee paid to a buyers agent. The amount could not be $0, it could be $1, but not $0. It can be $0 as of today btw.

According to the accusation anti trust laws were violated. I am not going to say I know how those laws are written. Perhaps if NAR had not required compensation and allowed sellers to choose $0, we wouldn’t be here. Nonetheless, lawsuits were filed and a settlement was agreed to by both parties.

What’s Different?

There two major changes so far:

#1. Listing agents are not allowed to advertise a fee being paid to the buyers agent in the MLS. This is an attempt to “decouple” the commission meaning they want the buyers to pay the fee or the fee to be negotiated at the time the offer is written. Fair enough. Is that a good idea? We will soon find out.

This does not mean the seller is not allowed to pay a buyers agent? No it means they don’t want the fee advertised on the MLS.

How will it work? We do not know but I think it will make buying a house more of a nightmare than it already is.

#2. Buyers will be required to sign an agency (representation) agreement before seeing any home with a licensed Realtor. No more hey call a Realtor and lets go see this house in person and expect to be let in no questions asked.

The Future For Buyers & Sellers

{This all goes into affect mid July 2024}

How will this change the way homes are sold as a seller?

  • You will be told that you no longer are required to pay a buyers agent and it seems as if you are being encouraged not to by everyone. Many if not most sellers who are in a strong sellers market will choose not to if given the option.
  • Sellers in many cases will only be paying a listing agent and as a result will put more money in their pocket.
  • Sellers should expect to have to deal with a much higher percentage of buyers who have no guidance. Sometimes that will end up being better, sometimes much worse.
  • Your house will not have as many showings as before because there will be fewer or no buyers agents to take the buyers to your home.

BTW If buyers agents go away, (I think they will) buyers on a tight schedule will be seeing fewer houses and your listing will be shown to fewer buyers as a result. We will need to figure out who shows the houses to the buyers if there is no buyers agent being paid. Listing agents can not show all of their listings every time someone wants to see it.

Buyers agents are set up show buyers several houses at the same time. If they are forced to rely on the buyers to pay them, they will be getting another job within 6 months…

How will this change the way homes are sold as a buyer?

  • Buyers are going to be required to sign an agreement with a buyers agent before they are allowed to see houses according to the new rules. Gone are the days of calling a random agent to see a house in a moments notice and meeting them at the house.
  • Buyers will potentially be faced with having to pay for your own real estate agent or having to call the listing agent and deal with them directly. The result will be people who can’t afford one, will be stuck with the person representing the seller (the listing agent) and going it alone. *This is how it worked prior to 1996 btw and it’s the reason buyers agency was created in the first place.
  • If you choose to pay for a real estate agent you will look for an affordable option and in life you get what you pay for.
  • You are going to have a much harder time finding a seasoned professional who will be available to show you lots of houses on a flexible schedule and do a great job looking out for you without setting aside a sizable amount of money. Most of the seasoned agents will focus on listings because they want to get paid, it’s common sense.
  • This will result in lower income and first time homebuyers getting the very short end of an already very short stick.
  • Did I mention the lawyer who brought the lawsuit is making $600 million on the first lawsuit and is now suing tons more real estate companies on behalf of buyers now? The seller plaintiffs are all getting $21, maybe the buyer plaintiffs will get $31!

Who deals with the buyer to set expectations and guide them?

  • Probably the listing agent who works for the seller only. That will benefit the seller.
  • Sellers should expect unrepresented buyers to be much more difficult to deal with making the process more aggravating. The need for an expert listing agent will be more important than ever.

The End Result?

  • Sellers will keep more money
  • House prices will stay the same
  • It will be even harder to buy a house
  • Low income/first time & VA homebuyers will be at a huge disadvantage
  • The great Realtors will not agree to work with people who cant afford them causing the quality of service to degrade for buyers.

Is This A Fair Outcome?

As a result of the settlement you are likely going to be receiving a whopping $21! The attorney who said Realtors were making too much money will make 600 million dollars on the first round of lawsuits, seems totally fair…

Bigger Issues?

  • Over 40% of rental homes will be owned by investors by 2030 LINK
  • Homes are more unaffordable than ever in our history –
  • Interest rates are NOT going down once again LINK

So houses cost more than ever and the DOJ decides destroying buyers agents is the solution?

People Have Had Options All Along

Can you hire a discount brokerage? Sell your own house for sale by owner? Negotiate the commission with any Realtor? Redfin hello???

Type in “sell my house for cheap” in Google or skip it because I already found one right here in Maryland, and you can sell your house for $95! And if you want to by all means go for it, this is America, more power to you. Better yet do it for FREE on Zillow LINK

In 2023, during the strongest sellers markets in the history of earth, an all time low of only 7% of sellers chose to go it alone and sell for-sale-by-owner.

Do most people sell their own cars knowing that you can sell it for way more than you can get for it as a trade-in? Why not? The same reasons people hire real estate agents, they are afraid to screw it up and don’t want to deal with everything involved. Selling a car is WAY easier than selling a house.


If you bought or sold a house in the past 5 years you are most likely getting $21 as the result of several class action lawsuits. It stated that real estate brokers, because of rules from the National Association of Realtors, forced home sellers to put at least $1 in the listing agreement to pay a buyers agent and therefore forced high commissions.

NAR and several brokerages agreed to settle without admitting guilt for hundreds of millions of dollars.

The class action lawsuit for homebuyers (who typically pay nothing for buyers agent representation) is marching forward in a separate multi billion dollar lawsuit because they were damaged somehow. How? I don’t know because I haven’t read that one yet.

The legal basis for the lawsuits and the communications by the plaintiffs attorneys are different. The communication to the media has been that Realtors get paid too much and they (the attorneys and DOJ) are going to break up the industry by forcing us (Realtors) to change how or by whom we are paid.

They are trying to prevent sellers from paying the buyers agent and supposedly this will save everyone money.

In reality if a seller can sell without paying a buyers agent they will understandably.

Most buyers will choose not to pay for a buyers agent or for financial reasons will be forced to deal with the listing agent directly and will therefore be unrepresented when buying a home.

& In Conclusion

This is stupid and unamerican because every seller signed the agreement that outlined exactly who was getting paid and how much. At the settlement the numbers came out exactly how it was written in the listing agreement. If they wanted to, they could have said I am calling and paid $95 but they didn’t, they signed and paid what everyone agreed to, like we do in a free market society.

In the past 5 years sellers are making small fortunes every time they sell a house compared to the previous 50 years of home appreciation. They did not ask for this.

So now we are stuck having to figure out how to negotiate commission at the offer table? In reality, a trial lawyer found a loophole and pulled a fast one on everyone by attacking the real estate trade group (NAR) industry bi-laws.

He is raking in a cool 600 million by telling previous home sellers that they were tricked into paying Realtors when they sold their house. This is despite the fact that they agreed to it in writing. They will all be getting $21 he is getting 600 million and again who got tricked???

The world we live in loves the people “making too much money” getting “justice” so I get it. Maybe 30k to put a sign in a yard seems like a lot, maybe everyone should have called Homerise and maybe they will.

Or maybe they will still choose to call someone who has been doing this for years helping hundreds of families get through this process. Which by the way, according to this article that states that selling a home is considered less stressful than a week in jail LINK

What Will I Do?

Continue to focus on helping home sellers get the most money when it comes to selling their homes using a process unlike anyone in the area where I pay for a pre-appraisal, pre-home inspection, a consultation with a professional decorator, use the best photos, video, and social media marketing for listings in the area.

I will help my sellers negotiate from a position of strength and we will get top dollar! My clients will sell their houses faster and I will make it as easy and stress free. They will get more money when selling their house than if they never hired me.

Will I still help buyers? Yes, but I know the harsh reality is that most people do not have enough money saved to pay the down payment, lender fees, appraisal, taxes, transfer fees, title fees and still have room for a Realtor.

I hope they come up with a solution to finance the fees or perhaps home sellers will agree to keep paying. If not I will always take care of my people who are loyal to me and I will do whatever I can to help them.

I do have a family to consider and like you, I will make my decisions based on what is best for them. Thank you for listening to my ted talk.