What is happening with the NAR Settlement?

Over the past year, there have been several large lawsuits filed against the National Association of Realtors (NAR) and many larger brokerages. In March, 2024, NAR has agreed to a settlement that is still awaiting final approval from the courts. In the settlement, there are a few main points:

1. NAR denies any wrongdoing, as real estate has always been a negotiable business model.

2. NAR has agreed to pay a $418 million dollars over the next four years.

3. NAR will require MLS participants to have written buyer agency contracts between buyers and their brokers. **Note that Wisconsin has been requiring this for over 15 years.**

4. Offers of compensation will no longer be posted on the MLS.

Although the timeline for the agreement is currently mid-July, the federal court and the Department of Justice still must approve and perhaps make changes/recommendations, so the timeline may end up being pushed out further into the fall or even next winter.

What is the Impact in Wisconsin?

The reason we have not seen any lawsuits of this nature in Wisconsin is because we are one of the only states to have state approved and mandated contracts with very transparent language about who is getting paid what amount and by whom. It has been the law in Wisconsin for Realtors to have a signed Buyer Agency agreement with their buyers, so that item won’t change anything in our market. Currently, the only item that will impact our local market is the cooperative offer of compensation between the listing brokerage and the buyer brokerage. Many sellers are willing to compensate the buyer brokers through written agreement in an offer to purchase, however, if buyers need to make their offer more competitive, they may end up paying their buyer broker outside of the closing, which many buyers have already done in the past in For Sale By Owner situations.

I have always been extremely transparent in discussing the ways that realtors are paid and how representation works in the real estate business. I have always worked with a buyer agency agreement with my buyers. Therefore, although the settlement will certainly stir up the industry, those of us working as professionals in the business will continue to work in the best interest of our clients. I will keep you posted this summer on how this settlement evolves.