As you know, the National Association of REALTORS® announced on March 15 that it plans to enter into a global settlement that would resolve all pending antitrust cases against NAR, state and local REALTOR® associations, Multiple Listing Services that are affiliated with such associations, and some, but not all, brokerage firms.

The settlement document is lengthy and complex, and we are still studying it. It raises a number of issues that still have to be worked out. NAR is preparing a guidance document to assist REALTORS® in complying with the Agreement and we will work to implement that guidance once received.

For now, we want to give LVR members a summary of the key points as we understand them.

1. All antitrust cases currently pending against NAR, state and local REALTOR® associations (including LVR), and affiliated MLSs would be dismissed. NAR would pay $418 million in settlement. REALTOR® associations and MLSs would be dismissed from the lawsuits without any payment, provided that each relevant MLS explicitly agreed to make the changes set forth below.

2. Real estate brokerage firms with a total transaction volume for residential homes sales in the year 2022 of $2 billion or less would also be dismissed from all pending cases without payment by these defendants. However, the lawsuits against brokerage firms with a transaction volume for residential home sales of greater than $2 billion in 2022 would not be dismissed from these suits.

3. This means that the currently pending Whaley and Boykin cases would be dismissed against the defendant associations and MLSs (including LVR and the GLVAR MLS) as long as they opt in to the settlement provisions – and against the smaller defendant brokerage firms. However, the cases would proceed against the larger defendant brokerage firms. 

4. In order to be dismissed from the lawsuits, several important changes would have to be made to the rules of the MLS. The most significant of these are summarized below.

• The MLS would have to prohibit sellers and listing brokers from making any offers of compensation to buyers or buyer brokers on the MLS – and from disclosing listing broker compensation or total broker compensation – on the MLS. Moreover, the MLS could not, with certain exceptions, facilitate or support any non-MLS mechanism for listing brokers or sellers to make offers of compensation to buyer brokers. Sellers could, however, offer buyer concessions on an MLS (for example, for buyer closing costs) as long as the concessions are not conditioned on the retention of, or payment to, a cooperating broker.
• The MLS would have to require that any MLS participant working with a buyer would have to enter into a written agreement with the buyer before the buyer tours any home. The agreement would have to specify the amount or rate of compensation that that the buyer broker will receive from the buyer and the amount that the buyer broker will receive from any other source. The agreement would also have to provide that the buyer broker could not receive any compensation for brokerage services that exceeds the amount or rate agreed to in the agreement between the buyer and the broker.
• The MLS would have to prohibit MLS participants from representing that their brokerage services are free or available at no cost unless they receive no financial compensation from any sources for their services.
• The MLS would have to require REALTORS® and all MLS participants to disclose to all prospective buyers and sellers in conspicuous language that broker commissions are not set by law and are fully negotiable.
• The MLS would have to prevent any system by which participants could filter out MLS listings based on the existence or level of compensation offered to the buyer broker.
• The MLS would have to rescind any rules that are inconsistent with the above provisions and would have to develop, or provide, educational materials that reflect these provisions.

At LVR we are committed to keeping you updated with the most timely information and we will continue to update you on developments regarding both the lawsuits and the NAR settlement. For additional information, visit facts.realtor and competition.realtor.