National Association of Realtors Drops Policy on Commissions and Settles Litigation


The National Association of Realtors (“NAR”) today announced that it has reached a settlement agreement regarding a number of lawsuits that are related to the manner in which realtor commissions are valued and shared in residential transactions. The agreement will bring an end to what originated in Chicagoland, providing that the real estate agents for both the buyer and seller agree to share a singular commission. In most instances, the brokers divided in half the commission that was set at between 5% and 6%. However, the old NAR rules provided that the split could provide that one side could get nothing. The lawsuits at issue argued that this “sharing rule” resulted in collusion by keeping prices high and preventing a buyer’s agent from competing against a fellow agent on price.

The settlement agreement, which has not yet been approved by the courts, will release claims against the NAR, its members, various realtor associations and various Multiple Listing Services (MLS) associations. Brokerages with more than $2 billion in volume will not be released under the agreement.

The Agreement calls for the NAR to make payments totaling $418 million over four (4) years. The agreement also requires the NAR to prohibit the use of the MLS system as a tool for communicating offers of Cooperative Compensation between brokers. Cooperative Compensation is the system in which the Seller’s realtor offers a share of the commission to be paid by the Seller to the Buyer’s realtor. While Cooperative Compensation will continue to be an option for the parties involved in a transaction, it must now be negotiated by the parties outside of the MLS system. Finally, the NAR has agreed that it will enact a new rule that will now require written agreements between all Buyer’s and their realtors.

The settlement agreement does not include HomeServices of America and its related companies. The new rules are expected to go into effect in mid-July of 2024.

While industry experts and associations are projecting that commissions to be paid to realtors could be reduced by as much as 30%, it remains to be seen whether Buyers and Sellers will utilize these new rules and commence negotiations with the realtors.

The attorneys at Airdo Werwas, LLC are available to consult with you on any matter concerning your business. If you have questions regarding commercial or residential real estate issues, please do not hesitate to contact Steve Patterson at or at (312) 506-4471.

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