NAR Settlement: Ten More Days
The final countdown is on, and the metaphorical time square ball is dropping for the NAR Settlement. However, the mood is tense, not celebratory. This is the largest shift in the Real Estate Industry in decades when President Lyndon B. Johnson signed the Fair Housing Act (FHA) into law on April 11, 1968. Revaluate Blog readers have been staying up to date on this lawsuit and its ramifications since we originally wrote about the suit in the fall of 2021.
The National Association of REALTORS® (NAR) settlement is the billion-dollar agreement with the Sitzer/Burnett plaintiffs that resolves antitrust lawsuits over the NAR’s commission structure and compensation offers. The settlement was reached in March 2024.
Home Buyer Impact
Home buyers don’t fully understand the timing nor the details. Many seem to believe that the change has already occurred. They learned via the Blitz of news when the settlement broke that NAR had settled this spring. But at that time, the details were not fully understood. Now we know the significance of changes and timing.
Agent Impact
Agents are also not fully aware. Frankly, because buyer compensation rules vary from state to state, the messaging has had to have been fragmented. Making education more difficult and very specific. Teams and agents are working (or should have been working) to align their business practices with the outcome of the settlement. Long time Revaluate client Brad Allen shared with me that he primarily focuses on clients in South Carolina, and his state has always required buyer representation documentation. Thus, the impact is significantly less for agents in the 18 states that wont need to make that change.
Conclusion
These changes are significant. While not be as impactful to consumers as Lyndon B. Johnson’s Fair Housing Act, it still is sweeping reform that theoretically is helping home owners and avoid price fixing. But… the real winners are the lawyers. Reportedly they are making over 30% of the settlement.
As with any change that impacts Realtors, be it market conditions, leads or laws there will be winners and losers. The real estate agent population is large and roughly 50% are not full time. Some will fail to comply and have to face penalties. Others will shine, and rise to the occasion. I don’t think that this is the final change we will see in our lifetimes, but rather it may be only the tip of the iceberg. These changes do move forward at a glacial pace.
Two things have not changed in my mind. 1) Change is inevitable. 2) Adaptability is the solution.
