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Recently, a few people have cautiously asked me, “How are you? You know with the lawsuit and all.”

After almost 2 decades of practicing in the roller coaster world of real estate, I realize that when someone asks me, “How are you (in a certain way)?” or “Are you busy?” that they are really asking for an update on how real estate might be affecting them and their loved ones.

Let’s face it, my businesses prosperity in many ways is a direct reflection of how the economy and people who live within it are doing since  65.9% of US citizens own real estate and the real estate industry accounts for approximately 16.9% of GDP in our country.

Let’s talk about the elephant in the room, the N.A.R. class-action lawsuit. A huge part of my job is to educate, let’s jump in. I’ll try not to get too far into the weeds of it.


The Plaintiffs (Missouri Home Sellers)

Rhonda Burnett, Jerod Breit, Jeremy Keel, Frances Harvey, Hollee Ellis

The Defendants (The RE Big Boys)

The National Association of Realtors
Keller Williams
Anywhere (formerly, Realogy)
HomeServices of America
HomeServices subsidiaries BHH Affiliates and HSF Affiliates
( Anywhere and RE/MAX have settled out of court.)

The Allegations 

According to an Inman News Article, “The plaintiffs allege that NAR’s Participation Rule, which requires listing brokers to offer buyer brokers a commission in order to list a property in a Realtor-affiliated MLS, violates the Sherman Antitrust Act by inflating seller costs. The model rule applies to all 500 or so MLSs owned by Realtor associations nationally.” The word conspiracy was brought up a lot.

The Verdict

On Halloween, after a 2-week trial, an 8-person jury deliberated for only 2 hours and 28 minutes before unanimously awarding an astonishing $5.36B in damages to home sellers according to news articles.

The Defendants have appealed arguing that Sellers have always had the right to choose the amount of compensation.

If laws change and a Seller chooses not to pay a Buyer Agent commission when placing their property in the MLS….

 How Could Home Buyers Be Affected?

  • The practice of Buyer Broker Compensation Forms/Agreements could become more common where Buyers and their agents negotiate compensation fees prior to beginning the home search process.
  • How many Buyers will be able to afford to pay for representation above and beyond their down payment, closing costs, appraisal and inspection fees with present affordability challenges?
  • How many Buyers would know how to negotiate such a fee?
  • What if more Buyers forgo Buyer representation and go the Dual Agency route (Listing Agent Representing Both Buyer and Seller)? Will the Buyers best interests be considered?
  • How many Buyers know the complex process of buying well enough to protect themselves in a home purchase?

How Could Sellers Be Affected?

  • If Buyer Agent compensation is left as a negotiable term, how will this affect the sale of a property? For example, will there be a smaller buyer pool?
  • Again, if Dual Agency becomes more common will Sellers feel that they are represented as completely?

How Could the Look of Real Estate Change?

There are currently 1,578,077 members of the NAR and over 10,000 agents in the Portland Metro Area. According to the RMLS, in October the Portland Metro Area had 4,848 listings to sell. The math makes it pretty apparent. We are a saturated business.

New agents and Buyers Agents will be most affected by potential changes. To survive they will have to pivot and become flexible. My hope is that change will result in higher standards overall and an upliftment of the profession. An increase in a level of service is always good.

The Power of Transparency

Regardless of how this shakes out, it is clear that the real estate industry is in a movement of change and growth. Clearer transparency about how agents are paid and the real estate process can only serve the whole. I watched during the Great Recession as my lender colleagues went through an intense upheaval in their business resulting in greater transparency of the lending process. In the end , some have shared that it has made their job easier and most importantly serves the client.

So, the answer to the question “How are you?”  has been “I am Great!

I am hopeful, not afraid. To thrive in this crazy profession, you have to be resilient, flexible and highly dedicated to your craft and your service regardless of circumstances. It is and has always been about the clients. If the clients are somehow served better, then all is a win-win. I am always available for a good conversation on any topic. Just give me a ring!

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