Will the NAR Class Action Suit ~ Turn the Clock Back?

Real Estate Broker/Owner with Mackintosh REALTORS 82894
When I was first licensed back in 1985 all REALTORS® worked for the Seller by virtue of the MLS under a "unilateral offer of sub-agency" In the late 1980's the California legislature unanimously passed the agency disclosure law. This led to the CAR Model Rules, which changed a MLS from a "unilateral offer of sub-agency" to a "unilateral offer of compensation, sub-agency optional."  By the early 1990's each State passed a statute law to create buyers' agency.

Currently, NAR is the defendant in a class action suit that seeks to have home buyers pay their brokers directly, rather than having listing brokers pay buyer brokers from what the seller pays the listing broker. The plaintiff's suit alleges that some NAR rules violate the Sherman Anti-trust Act by inflating Seller's costs. The Participation Rule requires listing brokers to offer a blanket, unilateral offer of compensation to buyer brokers in order to submit a listing into a REALTOR®-affiliated MLS. The Clear Cooperation Policy requires listing brokers to submit a listing to their REALTOR®-affiliated MLS within so many business days of marketing a property to the public.
NAR guidance for local MLS broker marketplaces has long been recognized to promote fair, transparent, and competitive real estate markets for consumers and businesses. If the plaintiff's class action suit against NAR prevails it could revert the real estate world back to a unilateral offer of sub-agency model where agents exclusively represent the Seller. The Buyer would then be required to hire and compensate their agent for exclusive representation or be unrepresented and operate under the old model of "Buyer beware". Stay tuned as the class action suit goes to trial this fall.

Comments (35)

Lise Howe
Keller Williams Capital Properties - Washington, DC
Assoc. Broker in DC, MD, VA and attorney in DC

Michael J. Perry the problem is that many buyers already need closing cost help and under many loans  they won’t be able to add 3% more for buyer agency   It’s a dreadful rabbit hole we are heading down and we will get sued

Jun 10, 2023 02:08 PM
Buzz Mackintosh

Great point Lise Howe, lenders will not finance a Buyers portion of the brokerage fee!

Jun 10, 2023 05:29 PM
Kat Palmiotti
406-270-3667, kat@thehousekat.com, Broker/REALTOR® - Kalispell, MT
Helping your Montana dreams take root

Interesting. This could result in buyers who have to put their search on hold if they have the additional commission cost.

Jun 10, 2023 03:08 PM
Buzz Mackintosh


Kat Palmiotti or they go it alone as they did in the 1900's.
Jun 10, 2023 05:31 PM
Ed (Edward) Silva, 203-206-0754
Mapleridge Realty, CT 203-206-0754 - Waterbury, CT
Central CT Real Estate Broker Serving all equally

That sounds more like taking a few steps backward and truly creating issues for buyers, especially with the closing cost they already pay.

Jun 10, 2023 04:01 PM
Buzz Mackintosh


Ed Silva I would not mind taking a step backward and having a one-page contract as in the 1980's. It might make the process a little less intimidating for the Buyers.
Jun 10, 2023 05:37 PM
Brenda J. Andrew
Professional Realtor in Conroe/Willis, TX

Interesting Post Buzz.  Thanks for sharing.  I will be following this to see how it goes.  I've been in business 20 years this year, but most of the comments are before my time as a Realtor.  It will be interesting to see what comes of it.  

Jun 10, 2023 05:02 PM
Buzz Mackintosh
Mackintosh REALTORS - Frederick, MD
“Experience, reliable, leadership”

Brenda J. Andrew in my 38 years, I will say when I started in 1985 it was a more simple time, with a one-page contract, and a much less litigious society. The transactions today move at lightning speed compared to back in the day.

Jun 10, 2023 05:47 PM
Anna "Banana" Kruchten

Buzz those were the way simpler days by a long shot.  1 page contract and then it was 3.....which we thought was great back then.

Jun 10, 2023 09:16 PM
Andrew Mooers | 207.532.6573

     44+ years for me and in small rural markets some things don't change. Your home buyer does not need a building inspection. His Dad is a plumber, brother an electrician.

     Your buyer works for a contractor who has his boss help size up the place with the rest of his family that all use power tools.

     I buy donuts from local bakery, hot coffee and meet up Saturday morning at the home where the group crawl all over the place like spider monkeys. Inspection done before doing a contract. Done.

     Case of buying or not instead of let's renegotiate the price, and here is my honey do list I want the seller to perform. No on and off the market and in one morning, the family members size up the property easy peasy.

     It still is simpler in small rural markets without layers of players and hands on buyers are way way more savvy skill set and negotiation wise. And now it's the age of full disclosure. Listing inventory is still king in any market Buzz Mackintosh !

Not a lot of agents in small sparse populations so list it, market, sell it and I want the buyer to meet the seller and we mediate not litigate. 

Jul 22, 2023 01:21 PM
Paddy Deighan MBA JD PhD
http://www.medicalandspaconsulting.com - Vail, CO
Paddy Deighan J.D. Ph.D

Great Summary Buzz … so much drama over the years over issues that should be relatively simpler or address to everyone’s satisfaction

Jun 10, 2023 06:24 PM
Buzz Mackintosh

Paddy Deighan MBA JD PhD  the process was much simpler back in the 80's with less paper work and not as intimidating for the Buyers.

Jun 11, 2023 03:09 PM
Dr. Paula McDonald
Beam & Branch Realty - Granbury, TX
Granbury, TX 936-203-0279

This on-going lawsuit needs to be put to bed. I know our Texas licensing laws for real estate professionals include the necessary language for both buyer and seller representation.

Jun 11, 2023 12:36 PM
Buzz Mackintosh

Dr. Paula McDonald this case should have been put to bed in January however the current administration's DOJ appealed to keep the case alive....🤔

Jun 11, 2023 03:19 PM
Don Baker
Lane Realty - Eatonton, GA
Lake Sinclair Specialist

Our MLS has no Rule regarding compensation, it can say zero.  The only rule is you pay what is listed at the time of offer.

Jun 11, 2023 01:33 PM
Buzz Mackintosh

Don Baker I hope the Buyer agents in your market place have air tight buyer agency agreements!

Jun 11, 2023 03:21 PM
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

Thanks for the recap, Buzz, and a good discussion of potential issues depending on the outcome.


Jun 11, 2023 03:29 PM
Buzz Mackintosh

Jeff Dowler, CRS  hopefully NAR will prevail , I dread the day we have to learn a new business model with a whole bunch of new forms 🤯

Jun 11, 2023 06:02 PM
Jeff Dowler, CRS

Good point Buzz Mackintosh but the potential ramifications go far beyond some forms...costs for buyers and changes in how agency representation works for example.

Jun 11, 2023 07:43 PM
Myrl Jeffcoat
Sacramento, CA
Greater Sacramento Realtor - Retired

The bottom line is there is only so much money in a transaction.  The buyer has a certain amount, the seller needs a certain amount.  I don't think changing the deck furniture around on the real estate landscape will change that.  Commissions have been built into the pricing of homes.  I'll be watching for the outcome of this legal action.

Jun 11, 2023 04:20 PM
Myrl Jeffcoat
Sacramento, CA
Greater Sacramento Realtor - Retired

CONGRATULATIONS Buzz, on having this blog FEATURED in the Old Farts Club group!  

Jun 11, 2023 04:20 PM
Buzz Mackintosh

Myrl Jeffcoat  it amazes me the number of people in our industry who still don't understand agency or how to explain it. This is most likely why we are where we are today ! BTW , this Old Fart thanks you for the feature!

Jun 11, 2023 06:08 PM
Endre Barath, Jr.
Berkshire Hathaway HomeServices California Properties - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Buzz, I am not a fan of this and ironically have a draft post about it , just have been having a hard time tone down my views:) Congratulations on the Feature, Endre

Jun 11, 2023 10:32 PM
Buzz Mackintosh
Mackintosh REALTORS - Frederick, MD
“Experience, reliable, leadership”

Endre Barath, Jr.  I'm with you, most seasoned REALTORS® are not a fan of drastic change and this is what could be on the horizon should this case go the wrong way.

Jun 12, 2023 03:34 AM
Mark Don McInnes, Sandpoint-Idaho
Sandpoint Realty LLC - Sandpoint, ID
North Idaho Real Estate - 208-255.6227

Hello Buzz Mackintosh .  A lot of comments state the 'good ole days' of 1 or 3 page contracts.  The contracts only expand from with issues experienced by either buyers or sellers.  Our contracts today, for better or worse, still are meant to protect both the buyer and seller.  And the changes made came from mostly fradulent actions that loop holes in the 1 to 3 page agreements failed to address.  I agree it is a shame we have grown to this stage of litigation.  No one wins but a select few...seldom the public overall.  I agree with Endre Barath, Jr. , I have a difficult time framing my words carefully.  mdm 

Jun 12, 2023 01:08 PM
Buzz Mackintosh
Mackintosh REALTORS - Frederick, MD
“Experience, reliable, leadership”

Mark Don McInnes, Sandpoint-Idaho for better or worse our litigious society has made us live and learn over the years and life was a little easier and less stressful back in the day ☺️ ...

Jun 12, 2023 04:25 PM
Nick Vandekar, 610-203-4543
Long & Foster Real Estate Inc 610-225-7400 - Devon, PA
Selling the Main Line & Chester County

If buyers are going to compensate their agents, then banks need to allow these funds to be included in the mortgage, as they are already via the seller, or else this will block those with less deposits in the bank from obtaining representation if it has to be paid from cash.

Jun 13, 2023 08:29 AM
Buzz Mackintosh

 Good point Nick Vandekar, 610-203-4543 ,however I don't think the banks & lenders will do that and the whole appraisal process would need to change also as there is no line item on the form for brokerage fees.

Jun 13, 2023 09:05 AM
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

It gets complicated every year.  I am confused these days.  Sam Shueh

Jun 14, 2023 07:57 AM
Buzz Mackintosh

Sam Shueh  if things go the wrong way we just turn the clock back and work like it's the 1980's...

Jun 15, 2023 05:03 PM
Edward Gilmartin
CRE - Boston, MA

I suppose it can argued that sellers could pay listing agents a flat fee for their services. Buyers could pay buyers agents a flat fee for helping them buy a home.


Jun 15, 2023 04:56 PM
Buzz Mackintosh
Mackintosh REALTORS - Frederick, MD
“Experience, reliable, leadership”

Edward Gilmartin Yep, that is an option in today's real estate world. It's called a discount broker and probably not a REALTOR® , and an agent who is not bound by the code of ethics.

Jun 15, 2023 05:09 PM
Charles Ross - eXp Realty LLC
eXp Realty LLC Salina Group - Salina, KS
Love To Help People

Excellent post.Thank you for sharing. Have a wonderful day and a blessed week

Sep 13, 2023 03:58 AM