NAR Update: March 30, 2023

We have a legal update for you. Earlier today a federal judge in Illinois granted class certification in litigation related to how commissions are paid (Christopher Moehrl v. The National Association of REALTORS®). While we are disappointed in the decision, it’s still very early in the legal proceedings and we expect to ultimately prevail. As you know, pro-competitive, pro-consumer local MLS broker marketplaces ensure equity, efficiency, transparency and market-driven pricing options for home buyers and sellers. The practice of the listing broker paying the buyer broker’s compensation saves sellers time and money by having so many buyer brokers participating in that local marketplace and thus creates a larger pool of buyers for sellers. For buyers, these marketplaces save them the burden of extra costs at closing, enable them to receive professional representation and make homeownership possible for more people. In fact, the U.S. model of independent, local broker marketplaces is widely considered the best value and most efficient model in the world, with no hidden or extra costs and with more complete, verified information compared to other countries.
 
What this means for the litigation:
This is not a victory for the plaintiffs and does not change the facts of the case. The ruling was only procedural and now allows others who have allegedly been impacted to join the litigation as plaintiffs. It is expected that it will be a lengthy process before the case is fully resolved. 
 
What this means for you:
This decision does not require any action or comments on the part of members. We will keep you informed of any notable litigation milestones and reach out to associations in markets affected by the litigation ahead of any consumer notifications, which will not be for many months at the earliest.
 
In the meantime, I encourage you and your members to continue to refer to the Competition.Realtor website, which provides a comprehensive overview of how REALTORS® and the local MLS broker marketplaces benefit consumers. In fact, we recently uploaded three new infographics about buying a home, selling a home and working with a REALTOR®. As a reminder, you can also use the communications toolkits to help your members articulate their value. Additionally, we highly encourage the continued use of Buyer Representation Agreements in order to formalize a working relationship with clients and detailing what services consumers are entitled to and what the buyer broker expects from their client in return.
 
I also encourage you and your members to review two articles:

• One by NAR’s 2021 President, Charlie Oppler, which provides a comprehensive overview of our perspective on recent meritless lawsuits like this one;
• And one from Alfred Dellibovi, the former president and CEO of the Federal Home Loan Bank of New York and United States Deputy Secretary of Housing and Urban Development from 1989 until 1992, discussing how changes to broker compensation would have harmful impacts on first-time home buyers. 

 Thank you,

Lesley Muchow
NAR General Counsel & Vice President of Legal Affairs and Antitrust Compliance