Mark your calendars: 3 key dates for the industry and the DOJ
Several commissions-related milestones are coming up, starting with the NAR settlement opt-in deadline in less than two weeks.
Key points:
- Brokerages and MLSs not covered in the NAR settlement have until June 18 to opt in or forge their own path.
- Days later, the DOJ is expected to present its views in three key industry court cases.
- And in August, agents won’t see offers of compensation in the MLS, but they will need to see a signed agreement before working with buyer clients.
As summer approaches, the real estate industry will be paying close attention to the health of the market — and to upcoming milestones in the commissions cases.
Over the next few months, agents and other industry pros should be aware of three key dates that could determine how brokerage companies and MLSs will move forward in the wake of the NAR settlement:
June 18, the opt-in deadline for the NAR settlement
June 20 or 21, when the U.S. Department of Justice is expected to weigh in on three court cases
August 17, when the new NAR rules related to MLS fields and buyer agent agreements go into effect.
Here's what you need to know about each of these dates.
NAR settlement opt-in day
June 18 is the deadline for brokerages and multiple listing services not covered by the $418 million NAR settlement to opt in to the deal and avoid further litigation related to buyer agent commissions.
Around 90 brokerages — firms with more than $2 billion in annual sales volume — and 30 MLSs that are not wholly owned by Realtor associations are facing the June 18 deadline.
Several of the biggest brokerages have already reached agreements in the commissions cases, with the settlement fund tally at nearly $1 billion. Those include Keller Williams, Anywhere, RE/MAX, Compass, HomeServices of America, Real Brokerage, Realty ONE, @properties, Douglas Elliman and Redfin.
Brokerages that choose to opt in to the NAR settlement will have to agree to change their commissions practices and pay damages equal to .0025 multiplied by their average annual total transaction volume over the last four calendar years. A brokerage that averaged $2 billion, for example, would have to pay $5 million into the settlement account.
Any MLSs that opt in will pay damages equal to 100 multiplied by the number of their subscribers in 2023.
With less than two weeks before the deadline, most of the uncovered MLSs have been quiet about their plans. One exception is Northwest MLS, the largest MLS in Washington state, which announced that it would not opt in to the settlement and is keeping a revised version of its compensation field.
A spokesperson for NAR said the organization is encouraging those that have not opted in to consider doing so. The organization is also updating its settlement resources page with the latest information.
DOJ responses due
According to court documents, the DOJ has June 20 and 21 deadlines for responses or opinions in the Nosalek and REX Homes cases as well as its own case against NAR. Those statements may provide more clarity around the DOJ's intentions going forward.
In the REX case, which is currently in the U.S. Court of Appeals for the Ninth Circuit, the DOJ requested an extension to submit an amicus curiae brief by June 20. In asking for the extension, the DOJ said it needed additional time "to evaluate the legal issues in this case in light of its strong interest in protecting competition and consumers."
Also on June 20, the DOJ is expected to respond to NAR's rehearing petition. An appeals court agreed in March to reopen the DOJ's antitrust case against NAR, and the association has requested another hearing to try and reverse that decision. The deadline for the DOJ to respond was originally June 5 but was extended by 15 days.
In the Nosalek case, the plaintiffs' attorneys said in a letter that a joint statement with MLS PIN and the DOJ will be filed on or before June 21 regarding the questions raised by the court.
Settlement terms go into effect
On August 17, the policy changes outlined in the NAR settlement will take effect for the organizations and firms included in the deal.
For MLSs, the biggest change will be the removal of the offer of compensation field, which some organizations are replacing with an updated concessions field. Some large MLSs have already announced plans to update their systems ahead of the deadline. Non-Realtor MLSs that choose to opt in to the settlement will have until Sept. 16 to update their platforms.
And for agents and brokers, NAR's new buyer agreement requirement means that real estate professionals will need to have a signed agreement before working with a client. Buyer agents will also have to negotiate compensation with their clients if sellers are not willing to offer compensation or concessions.