Navigating the NAR Legal Verdict: What Agents Need to Know
On November 1, 2023, Phillip D. Wade Broker/Owner Dalton Wade Real Estate Group hosted a webinar titled “NAR Legal Verdict – Everything You Need to Know,” delving into the complex landscape of legal battles shaping the real estate industry. For those who missed it, the full replay is available on YouTube, or down below.
In this blog post, we’ll break down the key points covered in the webinar and explore the potential implications for both listing and buyers’ agents.
Legal Landscape
The legal battle first unfolded in Illinois (Christopher Moehrl, et al. v. The National Association of Realtors) and Missouri (Joshua Sitzer, et al. v. The National Association of Realtors, et al.) triggered by a prolonged investigation by the Federal Justice Department into anti-competitive behavior and price-fixing within the real estate brokerage industry. The Moehrl Case alleged collusion among NAR and four major brokerages. Notably, it challenged practices such as mandatory offers of compensation to buyer agents and restrictions on disclosing buyer commissions.
As of now, the situation in Florida remains mostly unchanged, but the implications of the legal battles are far-reaching.
Key Dates and Settlements
In Illinois, the lawsuit was filed on August 22, 2019, and no settlements have occurred to date, indicating an ongoing legal battle. In Missouri, the case was opened on October 8, 2019.
Settlements in this case started rolling in on September 12, 2023, with MLS PIN settling for $3 million.
This settlement was quicky followed by RE/MAX ($55 million) and Anywhere Realty ($83.5 million) on September 20, 2023 (this was part of the Missouri case). However, NAR and others continue to contest the case, culminating in a jury ruling against them on October 31, 2023, with a staggering $1.87 billion awarded (with the possibility of the damages being tripled).
The verdict is set to be appealed.
Impact on Listing Agents
For listing agents, it’s all about transparency. We advise agents to be upfront about their roles, highlighting the value they bring to the table, from photography and marketing to overall representation. With the disappearance of mandatory buyer agent compensation, listing agents need to clearly articulate their value proposition. This includes detailing their commission structure and explaining the potential impact on demand. In this shifting landscape, a compelling listing presentation becomes more critical than ever.
Advice: Keep it transparent, emphasize your value, and ensure your listing presentation is top-notch. Dalton Wade provides a downloadable presentation for its agents here.
Impact on Buyers Agents
Buyers agents might see more significant changes. The buyer’s broker agreement now takes center stage, emphasizing its increased importance. We recommends that agents clearly communicate the services they provide, including negotiation skills, property assessments, and the rationale behind their costs.
Advice: Emphasize the buyer’s broker agreement, communicate your services clearly, and justify your costs.
Our Insights
With the mandatory offer of compensation now history, Phil predicts the potential decoupling of MLSs from NAR. He envisions a landscape where resourceful agents dominate, leading to the rise of exclusive buyer and listing agents. More creativity in communication and increased transparency and competition are expected. The MO case final court rulings may swing either way on buyer compensation, where its is optional for the seller to pay the buyers agent commission or it is completely and legally de coupled from what the home seller pays in commissions.
The webinar concluded with a dynamic Q&A session, addressing concerns and queries from various Dalton Wade and Non-Dalton Wade agents.
In this rapidly evolving legal landscape, adaptability and transparency emerge as the keys to success for real estate agents. Stay informed, communicate your value effectively, and be ready to navigate the changes ahead. Watch the webinar below for all the insights, questions and answers that occurred during the original meeting.
This is an evolving story so check our blog for future updates or Google “NAR Law Suit” for up to the moment information.
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