A large verdict grabbed headlines last October when a federal jury from Kansas City, Missouri, awarded almost $1.8 billion in damages against the National Association of Realtors (NAR) and various major real estate companies for violating antitrust laws. While the parties and court sorted out whether a final judgment would be entered and on what terms, NAR settled the case and three other pending class actions in a landmark deal announced on March 15, 2024, that changes its MLS listing rules and broker requirements. Specifically, NAR agreed to pay $418 million over four years, change its MLS compensation rule that mandated a uniform compensation offer to buyer’s brokers, and requires buyer’s agents to enter agreements with their clients, among other things. These changes are bound to shake up compensation in an industry that, at times, seemed anti-competitive—particularly in high value markets where the commissions grew increasingly large for the same services.

NAR and the Adversary Commission Rule

The National Association of Realtors is an association of real estate agents with over 1.5 million members that governs the terms of multiple listing services (MLS) across the United States, among other things. The MLS is the local database that lists almost all residential real estate on the market; it is maintained to market and sell real estate. Each MLS is owned and operated by a local Realtor association that is a member of and governed by the rules adopted by NAR. Agents and brokers must also be members of NAR to access an MLS. As a natural consequence of NAR’s control over the rules governing MLS access, most agents and brokers became members of NAR to successfully represent their clients and maximize compensation.