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Here is what everyone should know. The recent settlement reached by the National Association of Realtors (NAR) has been all over the news over the past week. This includes headlines like, “Realtor lawsuit settlement unburdens home sellers from heavy commissions. What now for buyers?” by Yahoo Finance; “The end of the Realtor monopoly” by Business Insider; and “The huge $418 million realtor settlement means you can find a home online without having to pay a buyer’s agent commission” by Fortune. These sensational news titles often confuse and excite both real estate agents and home buyers and sellers. Here is what you should know about the changes for real estate commissions.


On March 15, NAR “announced an agreement that would end litigation of claims brought on behalf of home sellers related to broker commissions”. According to this press release from the Department of Justice, the lawsuit challenged “a series of rules, policies, and practices that have been widely adopted by its members which have resulted in a lessening competition among real estate brokers to the detriment of American home buyers.”

As a result of this lawsuit, and according to NAR, NAR agreed “to put in place a new MLS rule prohibiting offers of broker compensation on the MLS”. Additionally, “NAR has agreed to enact a new rule that would require MLS participants working with buyers to enter into written agreements with their buyers.”


  1. The National Association of Realtors (NAR) agreed to pay $418 million to compensate home sellers named in the lawsuit. They also agreed to changes in procedures and practices on a national level.
  2. A sellers’ compensation to Buyer Agents will no longer be allowed in the Multiple Listing Service (MLS). Home Sellers have always been allowed to and will continue to be allowed to compensation to home buyers in the form of closing costs. This may or may not include the cost of compensating home buyer agents. This information will not be allowed to be stated on the MLS.
  3. Nationally, all real estate agent representing home buyers will need an agreement with their clients before working with them. This ensures transparency on the services provided to the home buyer and the compensation the real estate agent will receive for those services. In Virginia, this is already the case.


Many news outlets have spun the reality of the lawsuit and subsequent settlement in several directions, often disparagingly against NAR and the Department of Justice. This is done to grab the attention of the public so that their articles get seen. Here are a few examples:

1. The Seller was REQUIRED to pay for the Buyer Agent and the real estate industry was operating as a “monopoly”. Another article refers to a “Real Estate Cartel”. Real estate agents and home sellers and buyers have and will continue to negotiate the terms of their contract.

2. This is the end of 6% Commission. This one will likely confuse most home sellers who have not heard of a “standard 6%” compensation. Again, compensation for real estate agents representing buyers and sellers have always been and will continue to be negotiable.

3. Home Prices will go up or Home Prices will go down. In Northern Virginia, these changes will not result in home sellers losing or gaining more than the fair market value of their home. Buyers will continue to determine the “fair market value”. Home sellers will continue to want the most for their homes and home buyers will continue to want to pay the least. The negotiation and final sales price between these two sets the fair market value.


1. Home sellers will likely be asked what closing costs, if any, they would like to offer potential buyers. Home buyers will be expected to pay for their own real estate agent. The good news for home buyers is that their agent can and will continue to negotiate with a home seller to assist in closing costs. As home sellers are not obligated to offer anything to a buyer, especially in a seller’s market when another buyer may not request any closing cost. Negotiations in the future may become even more complex.

2. Home buyers will be asked to sign agreements with their real estate agent of choice, likely before seeing any homes for sale. This ensures transparency on the services provided to the home buyer and the compensation the real estate agent will receive for those services. In Virginia, this is already the case. Negotiations on how a buyer will compensate an agent may include a percentage of the home sale price, a flat rate, or an hourly rate. Additionally, if home buyers are undecided on which agent to use, one-day or property-specific agreements are an option.

3. Some home buyers may opt to purchase a home without a real estate agent, especially if they cannot afford one. Real estate agents caution those who do this that they are more likely to fall victim to fraud or misunderstand the process. Home buyers should remember that the selling agent works for the owner of the home and is being paid to look out for the best interest of the owner.


In conclusion, Home Estate Realty Group speaks solely for themselves on this matter. We believe the changes that are a result of the lawsuit and subsequent settlement are an unfortunate result of lax bad practices. Regardless, we believe the changes will strengthen the service or real estate agents and promote more transparent practices. We look forward to continue working with and helping our clients navigate the real estate industry armed with pertinent information and solid representation. We are excited to continue to serve.

QUESTIONS? Please contact us.