Be happy! NAR’s settlement receives final approval

The National Association of Real Estate Agents (NAR) and the real estate industry at large have something to be thankful for this Thanksgiving. Judge Stephen Bough of the U.S. District Court in Kansas City, Missouri, on Tuesday granted final approval to NAR’s settlement agreement before the commission, as well as the settlements sought by HomeServices of America and the numerous MLSs and brokers who chose to agree to NAR’s settlement.

The approval comes despite a last-minute request from the Ministry of Justicein which DOJ challenged the settlement provision that requires buyers to sign a Buyer Agent Representation Agreement before touring a home with an agent. The DOJ believes that buyer broker agreements have the potential to “limit the way brokers compete for clients.”

“It is very similar to previous restrictions among competitors that courts have found to violate antitrust laws in other proceedings and could limit — rather than enhance — competition for buyers among buyer agents,” the DOJ wrote in its statement of interest filed Sunday. .

The DOJ also noted in its filing that the approval of the settlement “does not preclude any future enforcement actions by the United States, and compliance with the proposed settlement or the new NAR rules implementing that settlement will not provide a defense to such enforcement actions.” ”

Despite these concerns, as well as the objections of eight individuals and five attorneys who had previously filed lawsuits against the copycat committee, Bough granted final approval to the settlement.

While it is clear based on the DOJ’s Statement of Interests that this saga may not be over, Bough’s ruling marks an end to this chapter that began on March 15, 2024, when news of NAR’s settlement broke.

The settlement, which requires NAR to pay $418 million and agree to changes in business practices such as removing compensation offers from the MLS, was tentatively approved in late April. Due to the timeline surrounding class notices, the business practice changes – including mandatory buyer representation agreements – went into effect nationwide on August 17.

According to the plaintiffs’ request for final approval of the settlement, 15 million postcards and 24 million emails were sent to class members. Using various reporting mechanisms, attorneys believe they have been able to reach 99% of the settlement class members.

As of last week, nearly 500,000 people had filed claims to be part of the settlement, but eligible home sellers have until May 2025 to file a claim. In contrast, 39 class members have withdrawn from the settlement.

In addition to covering the organization itself, NAR’s settlement also protects all brokers who recorded sales volume of less than $2 billion in 2022, and all Realtor-affiliated MLSs. For companies outside this scope, the settlement included an opt-in mechanism allowing them to be protected under the agreement. According to the filing, 13 brokers and 15 non-broker MLSs opted into the settlement. These parties will pay an additional approximately $30.6 million to the settlement fund.

In turn, HomeServices of America will contribute $250 million to the settlement fund, as defined in the settlement negotiated in late April.

In a statement sent to HousingWire on Tuesday, HomeServices of America said it was “pleased” the settlement has received final court approval.

“We remain committed to supporting our people as they continue to deliver exceptional service to customers and communities across the country,” said Chris Kelly, executive vice president of HSA. “Our local business leaders, agents and employees deserve enormous credit for their exceptional ability to meet the challenges of the past year.”

He continued: “In addition to regulatory pressures, ongoing market dynamics continue to impact buyers and sellers, requiring innovative solutions. Looking ahead, HomeServices’ full-service model uniquely positions us to meet the needs of today’s consumers, who see homeownership as the most proven and reliable path to wealth creation. By remaining focused on solving these challenges, we strive to deliver unparalleled value and opportunities for our customers and communities.”

This is the third round of provision settlements for which Bough has given final approval.

In May, he granted final approval to the settlements reached Everywhere, RE/MAX and Keller Williams. In October he authorized the settlements reached Compass ($57.5 million), The real real estate agency ($9.25 million), At World Properties ($6.5 million), Douglas Elliman ($7.75 million, but can pay up to $10 million additional), Redfin ($9.25 million), Engel & Völkers ($6.9 million), Real Estate A Group ($5 million), HomeSmart holdings ($4.7 million) and United Real Estate ($3.75 million) in the combined Gibson and Umpa lawsuits.

This story will be updated with more information and commentary as it becomes available.