What’s Going on with the big law suit in real estate?
Just in case you missed it, a huge lawsuit has been filed against the National Association of Realtors(NAR) over a perceived violation of Antitrust Laws. A maelstrom of misinformation has flooded the media, drowning everyone in confusion. After attending a seminar to hear esteemed Wisconsin Realty Association(WRA) Attorney Cori Lamont, listening to video response of the entire WRA legal team, and reading WRA and NAR-sourced information, I present this simplified version of the issues at hand.
Multiple lawsuits have been filed against the NAR, some real estate firms, and Multiple Listing Services (MLSs). Buyers and sellers filed to complain about artificially-fixed commissions, higher costs, and higher home prices. These claims hinge on the NAR’s Participation Rule for firms representing sellers to offer compensation to firms representing buyers.
Anti-trust laws prohibit the setting of a standard commission for real estate. There never has been a “standard” commission – never will be. Perceived lack of transparency and claims of “conspiracy” are drivers in this lawsuit. And it’s a huge suit. The NAR is seeking to settle with the following terms:
NAR maintains no wrongdoing
NAR to pay $418,000,000
Proposed settlement is still subject to approval (July 2024?)
Written Buyer Agency will be required
No offers of compensation (commission) will be included in the MLS
What does this mean for Wisconsin buyers and sellers?
The NAR might agree to settle, but they maintain that no wrongdoing occurred. The amount of money involved in the lawsuit is extreme. The $418 million is only the settlement amount, and I won’t be paying (or receiving) any of that. Most agents (depending on firm involvement) are exempt from the suit. And, this proposed settlement hasn’t yet been approved. The approval date should occur in mid-July, with additional actions in December.
While some states have not required a written Buyers’ Agency Agreement, WI has used these documents for at least 15 years. (If I helped you buy a house, you can check your paperwork to see this agreement we both signed.)
Currently, agents can look at the MLS and see what the listing firm is offering by way of compensation to the buying firm on any property. In the future, that information will no longer be included in the MLS. Brokers and agents may post compensation offers on their public websites. Also, offers of seller concessions can still be listed in the MLS.
Wisconsin real estate statutes already provide for the practice of many pro-consumer policies addressed in this case. Our current contracts contain blank spaces for negotiated compensation amounts to be delineated, providing transparency for consumers. No copycat cases have been filed in Wisconsin.
Have more questions? Thinking of buying or selling? Call me! We will negotiate our contracts, and I will help you buy and/or sell!