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The National Associaton of Realtors Settlement

Real Estate Agent with Santa Barbara Real Estate 00898298

The NAR settled a lawsuit without acknowledging they or the membership had done anything wrong.  The lawyers, real estate disruptors, and the buyers who brought the suit have done more to confuse the process than help anyone other than themselves.  It’s not a win for buyers or sellers. The major news outlets continue to misinterpret what this settlement means.

I’m not an attorney and I’m not familiar with all the legal intricacies of the lawsuit, and all I’m offering here is, one person’s opinion. 

Many of the major media outlets are suggesting that commissions will drop because previously they were not negotiable and the standard in the industry was 6%.  Not true.  Commissions have always been negotiable in California. It’s in every listing agreement. Clear as day.  Successful agents don’t negotiate their commissions unless there are unique circumstances, there are some but that’s not what this post is about.

The lawsuit opens up all kinds of opportunities for listing agents to become “Dual Agents.” A Dual Agency is where the agent represents both the buyer and seller. Dual Agency is legal but not that simple and sometimes leads to all kinds of issues, problems, and litigation. Simply, how can the listing agent represent the interests of two parties, buyer and seller, that have different objectives? Once either party feels their agent is not advocating their position in the negotiating process a transaction could be jeopardized.

You sign a listing agreement that says you are the seller’s agent and advocate and then a buyer comes along that wants you to make an offer to the seller thinking this will put them on an inside track with the listing agent and seller that will play to their advantage and sometimes that’s true, but not always, and hence there’s always the potential for problems with dual agencies.

Experienced agents seem more adept at navigating these kinds of challenges. Fortunately, there are disclosure documents regarding dual agencies, and as long as they are in place, and the buyer and seller understand the disclosures, you should be fine.

All and all we wish you and yours the best with your real estate transactions. This story will continue to play out and hopefully, it will be for the betterment of the profession and truly beneficial to buyers and sellers. Time will tell. On my website TheRealEstateScene.com there are some excellent videos you'll find there on this subject.

Posted by

Mark Danforth Lomas

June Piper-Brandon
Coldwell Banker Realty - Columbia, MD
Creating Generational Wealth Through Homeownership

It seems to me that this litigation has taken us back centuries in the real estate world where buyers will now be buying homes unrepresented and the people who need the help most won't get it because they can't afford to pay. Also, none of this is law yet because a judge hasn't signed off on it and, the DOJ doesn't think the settlement went far enough.

Mar 27, 2024 01:47 PM
Michael Elliott

Not a chance of either of those things happening.   No one has said sellers cannot pay buyer agents.  

Mar 27, 2024 02:03 PM
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

This seems a little bit convoluted I hope it gets sorted out in how we treat each other and that people who care will start the proper programs to help people. hoping for the best.

Mar 27, 2024 02:33 PM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Mark Lomas in my opinion it is going to take a few years before the true impact of this settlement will really be know.  Personally I see more negative than positive for both Buyers and Sellers as a result of this settlement.

Mar 27, 2024 02:34 PM
Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

At the end of the day , the likely out come is Buyer Agents will lose 33-50% of their income as a result of this lawsuit ….

Mar 27, 2024 08:16 PM