A real estate agent helps a young couple in their home search.

NAR 'confident' in the face of challenges to compensation  

The association believes it will prevail in court, but also “highly encourages agents to use buyer broker agreements.”

July 21, 2023
3 minutes

Key points:

  • NAR is facing major lawsuits that could have sweeping consequences for the current model of buyer agency.
  • The association continues to express confidence that it will win in court but expects appeals regardless of the outcome.
  • While not advocating for policy changes, an NAR spokesperson said it was “imperative that agents continue to express that commissions are set between brokers and their clients.”

The National Association of Realtors has had its hands full this year, juggling consequential lawsuits, launching a search for a new CEO and managing crises regarding alleged discrimination

As the leading lobby group and trade association for real estate sales professionals, NAR is a force in D.C. and beyond — but an outcome against NAR in the buyer broker commission cases could impact the association's bottom line and will certainly dictate new rules and standards for the industry.

Despite the current pressure on the organization, NAR remains confident that the courts will rule in their favor — and even if they don't, expects appeals to follow — and maintains that the current system of buyer agent commissions is best for consumers. At least, this was the message from the organization's legal team shared by Mantill Williams, NAR VP of Communications.

"Our legal experts are confident we will ultimately prevail in each case because we act in the best interests of consumers, and the law and facts are on our side. The optimal scenario is for us to secure an immediate win in the trial," Williams said in an email. "However, it is highly likely that no matter which side prevails at trial, the losing side will appeal. That means a definitive ruling is not imminent and could take several years."

The two major commissions cases, Moehrl and Sitzer/Burnett, contend that the current buyer agency commission model is anticompetitive and bad for sellers. And there have been calls to action from industry leaders to start preparing for a future where agents need to discuss buyer exclusivity and compensation agreements with their clients from the get-go. 

Separating the buyer's agent commission from the seller's agent commission and having consumers directly compensate their buyer agent is something that could become more of the norm regardless of the outcome of the class action suit, some suggest. 

In its statement, NAR indicated that the organization is already in favor of agents procuring buyer agreements.

"NAR highly encourages agents to use buyer broker agreements and continue to express their value at every chance they get and ensure a transparent and mutually beneficial transaction," Williams said. 

"It is imperative that agents continue to express that commissions are set between brokers and their clients, how much competition there is, and their value, at every chance they get. This has been a mantra for several years now, and there is no better job protection than to remind consumers of all the ways you help them navigate the legal, community and financial aspects of buying and selling a home," he added.

But at the same time, NAR also argues that the existing business model is good for consumers.

"Buyer agents provide essential guidance as consumers navigate the legal, financial and community aspects for what is the most important purchase they will likely make in their lifetime," Williams said. "We remain confident that the current model is pro-consumer and pro-competitive, as it provides buyers and sellers many choices about the brokers with whom they work — from how they are paid to specific expertise to customer service — all at market-driven prices."

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