Understanding The NAR Lawsuit Settlement and Its Impact on Ohio Real Estate

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real estate agent signs documents - NAR lawsuit in Ohio

Recent headlines have brought attention to the lawsuit involving the National Association of REALTORS® (NAR) and its proposed settlement. If you’re considering a career in real estate, you may be wondering how these developments could impact your future success in the field. We understand your concerns – there’s a lot to digest. Here’s a concise overview of the court case and settlement for those interested in pursuing a career as a real estate agent.

Please note: Hondros College will be covering updates on this ongoing situation through a series of blogs. For a thorough analysis of the proposed NAR settlement and its implications for the industry, turn to Hondros College.

Related content: Explore more about the NAR lawsuit and settlement through this informative webinar.

Key Takeaways:

  • Recent headlines regarding the NAR lawsuit and proposed settlement have garnered interest among individuals contemplating a career in real estate, prompting questions about potential impacts on future success in the industry.
  • The lawsuit, Burnett v. NAR, found the NAR and certain brokerages responsible for inflating buyer agent commission fees, focusing on practices involving the advertising of commissions to buyer agents via Multiple Listing Services (MLS). Critics argue this practice could sway agent priorities.
  • The proposed settlement, anticipated to take effect in July 2024 pending court approval, aims to improve transparency in real estate transactions by requiring written buyer agreements that detail agent compensation, potentially altering how services are delivered in the market.

NAR LAWSUIT: BURNETT V. NAR, ET AL. VERDICT

On October 31, 2023, a federal jury in the U.S. District Court for the Western District of Missouri found the NAR and certain brokerages liable for artificially inflating buyer agent commission fees.

The lawsuit targeted the practice where seller agents advertise specific commissions to buyer agents via Multiple Listing Services (MLS). Critics argue this practice incentivizes buyer agents to prioritize properties offering higher commissions.

In response, NAR stated, “NAR does not set commissions, which have been negotiable long before this settlement and will remain negotiable between brokers and their clients.”

PROPOSED SETTLEMENT OF THE NAR LAWSUIT

In March 2024, NAR and plaintiffs reached a proposed settlement to settle claims concerning broker commissions on behalf of home sellers. Subject to court approval, this settlement is scheduled to take effect on July 1, 2024.

Under the proposed terms, REALTOR® members serving as buyer agents will need to enter into written agreements with buyers before providing services such as property showings or submitting offers. Compensation for buyer agents will be clearly outlined in these agreements, possibly based on a percentage of the sale or a fixed rate.

IMPACT OF THE PROPOSED NAR LAWSUIT SETTLEMENT

Aside from enhancing transparency around commissions and fees, the settlement may introduce additional changes that provide consumers with more options and cultivate a more equitable real estate market. To comprehend these shifts and their implications for new real estate agents, subscribe to the Hondros College blog.

Despite these developments, one constant requirement for aspiring agents is obtaining a state-specific real estate license. Commence your journey toward meeting these real estate licensing prerequisites in Ohio by seeking guidance from Hondros College today.

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