The T3 Sixty logo against a backdrop of houses.
Illustration by Lanette Behiry/Real Estate News; Shutterstock

A rallying cry as lawsuits over agent pay 'hit a critical point' 

T3 Sixty has sent an open letter to the real estate industry, urging everyone to take action now to get ahead of potential rulings in commissions lawsuits.

July 12, 2023
2 minutes

Key points:

  • “Foundational change” to agent compensation is likely “sooner rather than later,” the T3 Sixty letter states.
  • At issue: compensation for buyer agents, which plaintiffs say should be paid by buyers and not sellers.
  • NAR, brokerages and agents can take action now to minimize risk and be ready for any outcome.

The leading residential real estate consultancy has issued a call to arms for the industry to act now or risk getting caught unprepared for the potential of "foundational change" to the way agents get paid.

The open letter from T3 Sixty lays out an action plan for everyone from the National Association of Realtors to brokerages to agents, saying multiple lawsuits have "hit a critical point." 

Plaintiffs in these cases are challenging requirements that a seller must offer compensation to a buyer's agent, claiming that the system has led to inflated buyer-agent fees and arguing that buyers should pay for their own agents.

In one of those lawsuits, known as the Nosalek case, MLS PIN recently agreed to pay $3 million and stop requiring sellers to offer buyer broker compensation, a sign that "foundational changes to the structure — a decoupling of buyer broker compensation to some degree — will most likely occur sooner rather than later."

Two other cases, known as Sitzer/Burnett and Moehrl, are expected to go to trial in a matter of months.

NAR is a defendant in Sitzer/Burnett and Moehrl, along with several major real estate brokerage companies including Anywhere, HomeServices of America, RE/MAX and Keller Williams. Those brokerage companies are also defendants in the Nosalek case.

What real estate leaders should be doing now

"T3 Sixty implores brokerages and service providers to proactively prepare now to better serve consumers, reduce risk and smartly prepare for what could lies ahead," continues the letter, which is signed by T3 Sixty President and CEO Jack Miller and Executive Chairman Stefan Swanepoel, who is also the founder of Real Estate News.

The specific actions that T3 Sixty recommends include:

  • NAR should "require buyer's brokers to have signed buyer broker agreements that clearly spell out compensation terms signed before showing MLS-listed properties" and lobby for changes to mortgage rules that would allow buyer commissions to be financed.

  • Brokerages should "as soon as possible require signed, executed buyer broker agreements at the beginning of their agents' relationships with buyers" and audit existing materials to ensure they comply with current NAR rules on agent compensation messaging.

  • Agents should "review their sales and marketing materials for buyer services and update accordingly," addressing how "they and any agent are compensated."

These actions "will make the whole industry more resilient, improve service to customers, and prepare all for what comes next," the letter states.

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