$418M deal will upend agents' commission rates

Realtors were facing multiple lawsuits over fees

The National Association of Realtors on Friday agreed to settle litigation over commission rules for real estate agents, clearing the way for possible changes in how Americans buy and sell homes.

For homeowners and buyers, the proposed settlement marks an important shift, altering the way that agents communicate with each other about commissions in a move that may result in lower fees.

“We believe the potential changes would likely accelerate commission pressure on buyer agents, and could support overall commission rates around a home transaction trending lower in the near term,” William Blair analysts including Stephen Sheldon said Friday in a note.

The NAR, a trade group for U.S. real estate agents that counts about 1.5 million members, would pay roughly $418 million over about four years under the agreement, which is subject to court approval, according to a statement Friday from NAR. The Realtor group continues to deny any wrongdoing with how it structured a model rule for broker compensation.

The NAR has come under fire from multiple lawsuits taking aim at the industry’s compensation structure, in which sellers pay a commission — often around 6% — that is then divided between representatives for both sides of the transactions. In many cases, sellers have been compelled to enter into commissionsharing arrangements as a prerequisite for marketing their homes on multiplelisting services, the industry’s main tool for publicizing listings.

As part of the agreement announced Friday, agents won’t be able to put compensation offers on multiple listing services, moving talks about fees off those platforms. The group also will institute a new rule where buyer agents would have to enter into written agreements with their clients, a change that will take place starting in July, the group said.

Last year, a Missouri jury found the Realtor group and others liable of colluding to keep real estate agent commissions high in a $1.8 billion verdict. The changes announced Friday will release most NAR members from liability in that case, as well as some other pending lawsuits.

The Realtor group also is facing scrutiny from the