Unpacking the Impact

The Bill McGarrigle Team: Unpacking the Impact

Your Essential Guide to the Sitzer et al. v. National Association of Realtors Lawsuit

Navigating the real estate market comes with its fair share of complexities, especially when it involves key players like the National Association of Realtors (NAR) and platforms like the Multiple Listing Service (MLS). We'll address some frequently asked questions that our team has encountered and will shed light on the potential impacts of the class-action lawsuit, commonly referred to as Sitzer-Burnett, how it might transform the agent landscape, and why it could impact the buyer-seller relationship.  Whether you're a seasoned investor or a first-time homebuyer, staying informed about this development can help you navigate the market with confidence and make informed decisions.

Who is NAR?

NAR, the National Association of Realtors serves as the largest professional organization for real estate agents and brokers in the United States.  NAR provides a wealth of resources, including market data, legal support, and educational opportunities to help real estate professionals stay competitive and informed. 

What is Multiple Listing Service (MLS)?

A comprehensive database that aggregates property listings from various regions across the country, serving as a centralized platform where real estate agents can list properties for sale, share crucial information with colleagues and consumers alike, and connect buyers and sellers.

What is the Sitzer-Burnett class action lawsuit primarily addressing?

The primary allegation is that NAR, along with brokerages that require their agents to have a NAR membership, are violating antitrust laws by allowing commissions to be split between seller and buyer agents and by allowing commission offerings to be listed in the MLS. The homeowners bringing the lawsuit say these rules lead to higher costs for sellers and fewer choices for them. It is important to note, commissions paid to both buyer and seller agents has always been negotiable and has never been set by NAR.

What steps are being taken to resolve this lawsuit, and what is the expected timeline for its resolution?

Legal proceedings are ongoing, and the timeline for resolution depends on continued court proceedings. However, in the Sitzer-Burnett case, a preliminary settlement has been submitted to the court and is awaiting approval.. The initial changes or rulings related to the lawsuit could be implemented as early as July of 2024.

What major changes were proposed in the settlement agreement?

• NAR has proposed a rule prohibiting offers of compensation being visible on the MLS. It allows for off MLS negotiations of compensation and the continued allowance for seller concessions directly to buyers.

• Required use of buyer agency agreements between buyers and their chosen representative outlining compensation and other terms of representation. It is important to note that in the state of Pennsylvania, we’ve been using buyer agency agreements outlining these terms since 1998.

How does this stand to affect buyers & sellers?

The ultimate goal of the proposed settlement is to create more clarity around compensation and agency relationship and to allow agents to continue to support their clients in an effective way.

Given the ongoing nature of the suit and proposed settlement, our goal at the time of this writing is to provide some basic insight into what we know at this juncture. Our goal, as always, is to be a helpful market and industry resource for our friends and clients. If you have any questions or are interested in discussing further, please don’t hesitate to reach out to us.