T
he US Department of Justice has cast a shadow over a major real estate settlement, leaving Realtors uncertain about how to navigate the new rules without breaking the law. The $418 million settlement, which affects over 1.4 million members of the National Association of Realtors, was designed to address concerns that previous practices were pushing home sellers to pay excessive commissions.
However, just two days before a judge was set to approve the settlement terms, the Justice Department raised antitrust concerns about a new requirement for buyer-broker agreements. The DOJ suggested either removing this requirement or specifying that it does not provide immunity from future antitrust litigation.
Despite these objections, a Missouri federal judge approved the settlement without changes. Many real estate professionals are now worried that the settlement doesn't actually settle anything and that they could still face lawsuits over how they negotiate commissions.
The new rules, which took effect in mid-August, prohibit agents' compensation from being included on multiple listing services and require buyers' agents to discuss their compensation upfront through a written buyer agreement. Realtors are adjusting to these changes, but some are frustrated with the uncertainty surrounding the settlement.
"I think there's been a high level of frustration through the whole process," said Leo Pareja, CEO of eXp Realty. "Especially for agents who feel like they haven't broken a single rule."
The Justice Department's concerns about buyer agreements are a new development, and some experts believe it was a warning that Realtors are not immunized from further antitrust scrutiny.
With the threat of potential lawsuits looming, some Realtors are turning their anger toward NAR, the organization founded to protect their interests. Some brokerages are even considering leaving the organization due to the new rules and regulations.
Realtors like Leslie Heindel in New Orleans are trying to be transparent with home buyers about the new requirements, but the adjustment period has not been smooth. "There is definitely form confusion," she said of the new requirement for signed buyers' agreements.
