NAR Real Estate Legal Settlement: Misconceptions vs. Reality

March 28, 2024

Recently, the National Association of Realtors (NAR) reached a settlement in the Sitzer Burnett lawsuit, which will be implemented in July. Various media and government representatives have translated what this means in a very inaccurate manner.

If you've heard claims that this settlement will significantly reduce the costs associated with buying real estate, safeguard consumer interests, and make owning a home more accessible, it's important to understand that these assertions are not accurate.

We’d like to help accurately break down what is fact and what is a myth to create a clearer picture on how it affects buyers and sellers going forward:


Misconception: The NAR settlement will compel brokers to lower their fees.

Reality: The settlement doesn't impose fee standards for Realtors and allows fee negotiation as usual; it simply bans commission disclosure on the MLS.


Misconception: For the first time, sellers won't have to compensate the buyer's agent due to the NAR settlement.

Reality: There has never been a mandatory requirement for sellers to pay the buyer's agent, although it is a common practice. This settlement might change how compensation is offered and possibly put that compensation on the buyer.


Misconception: The settlement prevents sellers from compensating a buyer’s agent, relieving them of this financial obligation.

Reality: The settlement prevents listing/buyer agent compensation being disclosed on the MLS but not in other marketing, and sellers may still pay it to attract buyers or as negotiated in the sale.


Misconception: This settlement will significantly lower real estate prices and make homeownership more affordable.

Reality: Real estate prices are set by demand and supply, with fees like commissions being minor factors. Reduced commissions would likely not lower prices; rising property values and interest rates are the main causes of decreased affordability.


Misconception: This settlement will allow buyers to forgo representation and work directly with the listing agent.

Reality: Any agent working in the buyer will need to have that buyer enter into a Buyer Broker Agreement, which has been a common practice in many states prior to this lawsuit.


Debatable: The NAR settlement is beneficial for buyers who can now negotiate their agent's fee.

Reality: Buyers often prefer the seller to pay the agent's fee, easing their immediate financial burden and allowing them to finance the cost of the home purchase. In many cases we see this settlement working against first-time home buyers and VA buyers.


Misconception: The settlement will result in significant consumer restitution.

Reality: While the settlement is QUITE substantial, the actual per-person benefit is an estimated $10-$15 per plaintiff. The primary beneficiaries are the attorneys involved, who stand to gain significant fees estimated to be over $80 million from the settlement.


If there are any other questions we can help clear up in regard to this settlement and how it affects you as a buyer or seller don't hesitate to Contact Us!!

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