Proposed Settlement Agreement in Sitzer-Burnett, et al v NAR

Dated: March 18 2024

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NAR Agrees to Proposed Litigation Settlement

Florida Realtors President Gia Arvin said the state association “looks forward to continued opportunities for our members to provide their expertise and valued services.”

ORLANDO – The National Association of Realtors® (NAR) announced a proposed $418 million settlement agreement to the Sitzer-Burnett verdict that would end litigation of claims brought by home sellers related to broker commissions.

The agreement resolves claims against NAR, more than one million NAR members, state/territorial and local Realtor® associations, all association-owned MLSs and all brokerages with an NAR member as principal that had a residential transaction volume in 2022 of $2 billion or below. However, agents affiliated with HomeServices of America and its related companies – the last corporate defendant still litigating the case – are not released under the settlement, nor are employees of the remaining corporate defendants named in the cases covered by this settlement.

In response to the announcement, Florida Realtors® President Gia Arvin said, “From the national level to Florida Realtors and our local associations, we will continue to provide the programs, products and services that empower our members to implement new practices and successfully serve all consumers – ensuring members remain at the forefront of the profession and giving them the resources they need to communicate the value they provide.”

Arvin said the proposed settlement would not impact the important work Realtors continue to do statewide and nationally. She said Florida Realtors will continue to work to support its members.

“As we absorb the announcement from the National Association of Realtors regarding this monumental proposed settlement, Florida Realtors looks forward to continued opportunities for our members to provide their expertise and valued services to help consumers through the complex, challenging and ever-changing homebuying and home-selling process,” she said. “In the coming months, we will no doubt have more information and details to better our understanding of this complex and multifaceted proposed settlement agreement.”

The settlement stems from the Sitzer-Burnett class-action lawsuit that was filed in federal court by a group of Missouri home sellers against NAR and other defendants, including Anywhere, Berkshire Hathaway HomeServices, Keller Williams and RE/MAX. The plaintiffs claimed commission rates were inflated due to multiple factors, including cooperative compensation. In October, a jury ordered the defendants to pay nearly $1.8 billion.

Interim NAR CEO Nykia Wright said the settlement achieves two of the organization’s goals: preserving consumer choice and protecting members.

"Ultimately, continuing to litigate would have hurt members and their small businesses," Wright said. "While there could be no perfect outcome, this agreement is the best outcome we could achieve in the circumstances. It provides a path forward for our industry, which makes up nearly one-fifth of the American economy, and NAR. For over a century, NAR has protected and advanced the right to real property ownership in this country, and we remain focused on delivering on that core mission."

In addition to release from liability, the proposed settlement includes:

Compensation offers moved off the MLS: NAR has agreed to implement a new rule prohibiting offers of compensation on the MLS. Offers of compensation could continue to be an option consumers can pursue off-MLS through negotiation and consultation with real estate professionals. And sellers can offer buyer concessions on an MLS (for example—concessions for buyer closing costs). This change will go into effect in mid-July 2024.

Written agreements for MLS participants acting for buyers. NAR has long encouraged its members to use written agreements because they help consumers understand exactly what services and value will be provided, and for how much. The settlement provides that MLS participants working with buyers must enter into written representation agreements with those buyers. This change will go into effect in mid-July 2024.

Settlement payment: NAR would pay $418 million over approximately four years. NAR’s membership dues for 2024 will not change because of this payment.

NAR continues to deny any wrongdoing: NAR has long maintained that cooperative compensation and NAR’s current policies are good things that benefit buyers and sellers. They promote access to property ownership, particularly for lower- and middle-income buyers who can have a difficult time saving for a down payment. With this settlement, NAR is confident that its members can still achieve all those goals.

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Monica Luzarraga

For more than two decades, I've been working as a real estate agent and co-owned a real estate development company. Throughout this time, I have had the pleasure of working with a diverse range of cli....

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