Why the Current National Association of REALTORS® Lawsuits Are a Good Thing

You may have recently come across headlines about lawsuits and the National Association of REALTORS®. There is a lot happening in the real estate industry right now, so I wanted to take a moment to elaborate on what’s going on and what some of the impending changes mean for real estate agents, buyers, and sellers.

This explanation from the article “NAR: Real Estate Compensation Lawsuits Far From Over” in REALTOR® Magazine sums up the current lawsuits and what they are trying to achieve:

“The lawsuits claim that NAR rules violate antitrust laws and inflate the fees paid to buyer’s agents by requiring a listing agent to compensate a buyer’s agent for listing a property on the MLS. NAR argues that the lawsuits misrepresent association rules as anticompetitive. The rules direct listing brokers to determine, in consultation with their clients, the amount of compensation offered to a buyer’s agent in connection with their MLS listings. Further, NAR says buyer’s agents are free to negotiate compensation with the listing broker that is different from what appears in the MLS. Neither NAR nor the MLS has any say in setting broker commissions.”

Basically, the lawsuits are arguing that there needs to be more transparency regarding how real estate agents get paid.

There are several factors that make the Puget Sound area unique and in alignment with what the plaintiffs were asking for in their lawsuit(s):

• Our Multiple Listing Service is not REALTOR® owned.
• Our Purchase and Sale Forms are VERY transparent about who and how much is being paid. Both buyers and sellers complete these documents, and like other contracts, it is completely negotiable. There were significant changes made to increase transparency four years ago.
• Listing Agreements are also very transparent about what fees are being charged and where those fees go. This is also something that was changed four years ago.
• Sellers have been allowed to eliminate Buyer Compensation.
• Many REALTORS® have already been using the Buyers Agency Agreement, and as of January 1, 2024, recent legislation has made it mandatory to present this document to every buyer that is looking to be represented by a licensed Broker. This document explains compensation and the fiduciary duties and responsibilities the buyer is owed by the Buyer's Broker.
• This recent legislation also requires all Brokers to review a Broker Services Agreement with any new client. Again, this explains compensation, agency relationship, and terms of the broker relationship. This becomes mandatory as of January 1, 2024.

All of us at Windermere Professional Partners are encouraged and excited about these new changes as it further increases the transparency of our business. As a REALTOR®, it is important to illustrate your value proposition for the money your clients are spending. Who you hire to be your real estate agent matters, and this has been a choice for our customers in the past, and it will continue to be a choice for them in the future.

We as REALTORS® will continue to illustrate our value, but this national attention will most likely lead to additional questions and/or concerns. This is good news for the industry as a whole.

Let’s remove the perception of hidden agendas and embrace transparency. We have always felt that we are more of a consultant than a salesperson, and these changes lean much more to that direction. All of which is better for all of our clients and YOU!

If you have any questions, please feel free to reach out to any of our REALTORS®.