N
ational Association of Realtors president Kevin Sears revealed how close the trade group came to bankruptcy following the Sitzer/Burnett ruling. According to remarks on the "Crush It in Real Estate" podcast, Sears credited the settlement in the landmark commission lawsuit with saving NAR from financial ruin. The judge's approval of the settlement was announced just days before the episode was published.

    Sears explained that without the settlement, NAR would have had to post a bond of nearly $1.8 billion, which it couldn't afford. To appeal the ruling, the organization would have had to declare bankruptcy, leaving its members vulnerable in other lawsuits. Sears described bankruptcy as a "non-starter" due to the potential impact on NAR's advocacy efforts in Washington, D.C.

    The settlement terms included a $418 million deal to settle all commission lawsuits and overhaul NAR's policies regarding commissions. The changes prohibited listing brokers from offering commissions to buyer's agents on multiple listing services and required agents to secure signed contracts from buyers before home tours. However, the majority of real estate agents opposed these new rules, sparking conversations across brokerages about the role of the longtime industry authority.

    The Department of Justice had previously expressed concern over NAR's rule mandating buyer's agreements, which took effect over the summer. The DOJ clarified that the settlement doesn't grant NAR immunity from future action by the agency.