Am I Eligible for the NAR Settlement? Complete Eligibility Guide

By Frances I. Thorsen, REALTOR®

The real estate industry is undergoing a monumental shift, largely driven by the recent National Association of Realtors (NAR) settlement. For millions of Americans who have bought or sold a home in recent years, a critical question looms: Am I eligible for the NAR settlement? Understanding who qualifies for the real estate settlement is paramount, as the implications could affect your past transactions and future real estate endeavors. This comprehensive guide will dissect the eligibility criteria, shed light on the settlement's details, and explain what these changes mean for you.

The NAR settlement, totaling a staggering $418 million, addresses long-standing concerns about real estate commission structures, particularly the rule that mandated listing brokers offer compensation to buyer brokers. This practice, challenged under the Sherman Antitrust Act, has been at the heart of several class-action lawsuits. While the NAR settlement is a significant step, it's crucial to remember it's part of a broader landscape of legal actions and industry reforms. Let's dive into the specifics of these lawsuits and what they mean for potential claimants.

Understanding the NAR Settlement: The Basics

On March 15, 2024, the National Association of Realtors (NAR) announced a proposed settlement to resolve nationwide litigation against it, including the high-profile Sitzer/Burnett and Moehrl cases. This settlement, pending final court approval, aims to resolve claims that NAR's rules, specifically the "Participation Rule," led to inflated buyer agent commissions and violated antitrust laws.

Key Details of the NAR Settlement:

• Settlement Amount: $418 million

• Final Approval Date: Expected February 6, 2026 (this date is subject to change based on court proceedings)

• Primary Goal: To compensate home sellers who paid a buyer broker commission, and to implement rule changes that will fundamentally alter how real estate agents are compensated.

While the financial aspect is significant, the most impactful changes are regulatory. Effective August 2024, NAR will implement new rules eliminating the requirement for listing agents to offer compensation to buyer brokers through the Multiple Listing Service (MLS). This change is designed to foster greater transparency and competition in commission negotiations.

Who Qualifies for the Real Estate Settlement? Unpacking Eligibility

The core of the NAR settlement eligibility revolves around individuals who sold a residential property within specific timeframes and geographic areas, and who paid a commission to a buyer's agent as part of that transaction. It's not just about being a home seller; specific criteria must be met.

Primary Class Members: Home Sellers

Generally, the primary beneficiaries of the NAR settlement are home sellers who:

1. Sold a residential property: This typically refers to single-family homes, condominiums, and townhouses.

2. Listed their property on an MLS affiliated with NAR: The lawsuits targeted NAR's rules, so transactions involving an NAR-affiliated MLS are central.

3. Paid a commission to the buyer's agent: This is the crucial point. If your listing agreement included a provision for compensating the buyer's broker, you likely fall into this category.

4. Transacted within specific geographic areas and timeframes: The exact dates and locations vary by lawsuit. For the Sitzer/Burnett case, it generally covers sellers in Missouri, Kansas, and Illinois from April 2014 to June 2024. For the Moehrl case, it covers sellers in a broader range of states from March 2019 to June 2024.

5. Were represented by a brokerage firm that was a member of NAR: This is almost always the case if the property was listed on an NAR-affiliated MLS.

It's important to note that the settlement aims to provide restitution to those who were allegedly harmed by the previous commission rules. If you were a buyer, your eligibility is less direct, as the settlement primarily addresses seller-paid commissions. However, future changes stemming from the settlement will impact buyers significantly.

Excluded Parties

Certain parties are typically excluded from class-action settlements. These often include:

• Government entities.

• Individuals who opted out of the class action.

• Defendants in the lawsuit and their immediate families.

• Those who sold commercial properties exclusively.

• Individuals whose transactions did not involve an NAR-affiliated MLS or where no buyer broker commission was paid.

For a definitive answer on your specific situation, it's highly recommended to consult the official settlement administrator's website once it is established, or to speak with an attorney specializing in these matters. You can also utilize our Settlement Eligibility Checker for preliminary guidance.

Beyond NAR: Other Major Real Estate Settlements

The NAR settlement is the largest, but it's not the only one. Several major brokerage firms have reached their own agreements to avoid further litigation. These settlements also have their own eligibility criteria and impact the overall real estate landscape.

Key Brokerage Settlements:

• Anywhere Real Estate (Coldwell Banker, Century 21, Sotheby's): Settled for $83.5 million.

• RE/MAX: Settled for $55 million.

• HomeServices of America (Berkshire Hathaway): Settled for $250 million.

• Keller Williams: Settled for $70 million.

• Multi-firm Settlements: Smaller, yet significant, settlements include William Raveis ($4.1 million), Howard Hanna ($32 million), EXIT Realty ($1.5 million), Windermere, and Lyon Real Estate.

If you sold a home and were represented by one of these firms, or the buyer was represented by one of these firms, you might be covered under their specific settlements, potentially in addition to or instead of the NAR settlement. These settlements often have their own claims processes and deadlines. It's crucial to identify which settlement(s) might apply to your transaction.

Rocket Companies and CFPB Action

Adding another layer of complexity, Rocket Companies is facing a CFPB enforcement action expected in December 2024. While distinct from the commission lawsuits, this highlights the increased scrutiny across the entire real estate and mortgage industry regarding consumer protection and fair practices.

The Impact of MLS Rule Changes: What to Expect Post-August 2024

The most profound and immediate effect of the NAR settlement will be the elimination of the "Participation Rule" requiring listing brokers to offer compensation to buyer brokers through the MLS. This change, effective in August 2024, will reshape how agents are paid and how buyers and sellers engage with real estate services.

Key Changes and Their Implications:

• Direct Buyer-Broker Agreements: Buyer-broker agreement requirements will become standard. Buyers will need to directly negotiate and sign an agreement with their agent, outlining services and compensation. This fosters transparency and ensures buyers understand what they are paying for.

• Negotiable Commissions: All commissions, including those for buyer agents, will be fully negotiable outside of the MLS. This could lead to more varied commission structures, including hourly fees, flat fees, or direct negotiation of a percentage paid by the buyer.

• Increased Transparency: Both buyers and sellers will have clearer visibility into how agents are compensated, potentially empowering them to negotiate more effectively.

• Potential for Lower Costs: Some experts predict that increased competition and transparency could lead to lower overall transaction costs for consumers, particularly for buyers who might now directly pay their agent.

• Shift in Agent Roles: Buyer agents will need to clearly articulate their value proposition to justify their fees, as their compensation will no longer be automatically offered by the seller's side.

• Steering Practices: The new rules aim to mitigate concerns about "steering" – where agents might guide buyers towards properties offering higher commissions. With direct buyer-agent compensation, this incentive is reduced.

These changes are designed to address the antitrust concerns raised by the lawsuits, promoting a more competitive and consumer-centric market. For real estate professionals, adapting to these new rules, including revised buyer-broker agreement requirements, will be critical for continued success.

Navigating the Future: What Should You Do?

Whether you believe you have NAR settlement eligibility or are simply looking to understand the future of real estate transactions, proactive steps are essential.

For Potential Claimants (Home Sellers):

1. Gather Documentation: Collect all relevant documents from your home sale, including listing agreements, closing disclosures, and settlement statements. These will be vital for proving your eligibility and the amount of commission paid.

2. Monitor Official Announcements: Stay informed about the final approval of the NAR settlement and the establishment of the official claims website. This is where you will find the definitive criteria and instructions for filing a claim.

3. Consult Legal Counsel: If your situation is complex or you have significant questions about who qualifies for the real estate settlement, consider speaking with an attorney specializing in class action lawsuits or real estate law. Our Attorney Directory can help you find qualified professionals.

4. Use Our Resources: Check our Settlement Eligibility Checker and browse our Document Library for more information and resources.

For Future Home Buyers and Sellers:

1. Understand New Compensation Models: Be prepared for direct negotiations with your agent regarding their compensation. As a buyer, you may need to budget for your agent's fees directly.

2. Insist on Buyer-Broker Agreements: If you are a buyer, ensure you have a clear, written agreement with your agent outlining their services, duties, and compensation before viewing homes.

3. Educate Yourself: The real estate landscape is changing. Understanding the new rules will empower you in your next transaction. Our Impact Calculator can help you estimate potential changes to your transaction costs.

4. Choose Your Agent Wisely: With increased transparency, the value proposition of a real estate agent will be more critical than ever. Choose an agent who clearly demonstrates their expertise and provides exceptional service.

Conclusion: A New Era for Real Estate

The NAR settlement marks a pivotal moment, ushering in a new era for the real estate industry. While the process of determining NAR settlement eligibility and distributing funds will take time, the long-term impact on how homes are bought and sold is undeniable. For consumers, these changes promise greater transparency, more negotiation power, and potentially a fairer market.

Staying informed and understanding your rights and options is crucial. Whether you're a past home seller wondering if you qualify for compensation, or a future buyer or seller preparing for new transaction dynamics, the information provided here is designed to guide you through these transformative times. We encourage you to continue monitoring updates and utilizing the resources available to ensure you are well-prepared for the evolving real estate landscape.

Disclaimer: This blog post provides general information and is not intended as legal advice. For specific legal guidance regarding your eligibility for the NAR settlement or any other real estate legal matter, please consult with a qualified attorney.

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