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New rules stemming from the National Association of Realtors’ commission lawsuit settlement went into effect Saturday following years of litigation, potentially upending the industry, including how agents get paid.
Inman has covered the topic extensively and last week published a rundown of the rules that now govern NAR members and affiliated multiple listing services. This week, we’re calling agents, brokers, MLS executives, portals and other insiders as the rules rollout. Follow along as we update this story in real time.
MONDAY, AUGUST 19
12:45 p.m. ET: OPEN HOUSE, OPEN QUESTION: Among the real estate professionals watching how the settlement changes unfolded this weekend was Collabra Technology CEO Russ Cofano, who told Inman that colleagues on the ground relayed their activities at home showings and open houses on Saturday.
Buyers appear to be leery about signing short-term agreements and may favor open houses over individual tours until they’re at ease with the rules, he said.
“It’ll be very interesting to see whether open house traffic increases, which I expect it will once buyers understand they don’t have the same friction with agreements by going directly to open houses,” he told Inman Monday by phone.
“One stat we’re going to be looking at is the number of open houses relative to active listings. That’ll let us know whether buyers truly do use them as a less frictious way of accessing the property versus touring with a buyer’s agent.” —Marian McPherson
11:28 a.m. ET: WHAT ARE YOU SEEING? As the lunch bell approaches, Inman wants to know what friction, distractions, slowdowns or complications you’ve encountered today. Let us know with your vote and we’ll report back later today.
10:33 a.m. ET: NO LONGER INTERIM: Nykia Wright, who has served as the interim CEO of the National Association of Realtors since November, will stay on as full-time head of the organization, NAR President Kevin Sears confirmed Monday.
Wright joined the 1.5 million-member organization after leading the Chicago Sun-Times through its tumult and transition into a nonprofit newsroom. Wright was asked last week whether she would stay on as CEO but deflected.
“I bloom where I’ve been planted,” she said, “and I let the universe take care of the rest of the details.” —Taylor Anderson
10:05 a.m. ET: NAR SUIT FILED, DROPPED: A South Carolina real estate brokerage filed a class action lawsuit against the National Association of Realtors and seven state Realtor organizations Friday, alleging the group violated federal antitrust laws by compelling membership in order to effectively conduct business. It withdrew the lawsuit the same day.
In its complaint, the Cassina Group initially targeted a “mandatory triple membership” of local, state and national Realtor associations it says is required for real estate professionals to access lockboxes and transact properties. It would have been the second lawsuit targeting NAR and the fees and other rules in place that compel members to pay fees to conduct business.
The suit was filed Aug. 16, a day before the NAR settlement deadline, in the U.S. District Court of Northern Illinois, before being withdrawn. — Taylor Anderson
6:30 a.m. ET: READY, SET, GO: With all the commotion over the changes this weekend, Inman wants to know how you’re coping. Our reporters are working the phones this morning, but give us your first impressions of the week, below, and we’ll update the blog with responses this afternoon. —Jotham Sederstrom
5:45 a.m. ET: WATCHING THE DETECTIVES: Whatever you do, whatever you think you can do under the new rules, the plaintiffs’ attorneys will be watching.
That’s according to Michael Ketchmark of Ketchmark & McCreight, lead plaintiffs’ counsel for Sitzer | Burnett, the only suit among two dozen filed nationwide that has gone to trial. That suit resulted in a massive jury verdict in favor of the plaintiffs and against NAR and franchisors Keller Williams, Anywhere, RE/MAX and HomeServices of America.
Inman Deputy Editor Andrea Brambila spoke to Ketchmark ahead of the Aug. 17 deadline and his message was clear: Attorneys will be monitoring the actions of agents, brokers and MLSs this week and they have a variety of levers to pull if they witness anyone violating the rules. READ THE INTERVIEW.
5 a.m. ET: After months of anticipation, it’s Monday, and we’re finally living in our “New Normal,” where buyer’s agent compensation is no longer offered via Realtor-affiliated multiple listing services, and all buyers need to sign some type of agreement before a buyer’s agent takes them to tour a property.
We’ve known for a while that the rule changes of the proposed National Association of Realtors settlement would go into effect on Aug. 17, but with all of the questions, concerns and confusion surrounding the implementation of the new rules, agents and brokers are still looking for clarity.
Inman Editor Christy Murdock has compiled many of the questions you have, along with others we’ve encountered nationwide. The goal is to create a comprehensive resource to help our readers feel more confident and secure as you acclimate to the major changes. Check back as we fill in the resource with more of your unanswered questions. READ THE STORY.
SATURDAY, AUGUST 17
7:30 a.m. ET: DAWN OF A NEW DAY: Beginning today — Saturday, Aug. 17 — the real estate industry is poised for an exciting new chapter as the commission lawsuit settlement officially takes effect. On the historic day, Brad Inman offers his thoughts on how the industry can exceed its own expectations under the changes.
The best agents will thrive, the profession will be elevated, rot will be removed and brands built on trust and integrity will rise to the top, Inman writes.
“Fewer corners will be cut and the industry’s tainted reputation will be repaired,” Inman adds. “Substance will trump flash.” READ THE STORY.
6:02 a.m. ET: Five months after the National Association of Realtors agreed to a landmark antitrust settlement, the rules resulting from it go into effect today.
The rules will determine both how agents will get paid, and how consumers search for homes. In the former case, homesellers and their brokers will no longer be able to offer commissions to buyers’ brokers within NAR-affiliated multiple listing services.
In the latter, buyers will need to ink an agreement with their broker before touring a home. Other rules require brokers to disclose that commissions are negotiable and bar MLSs from helping seller agents make offers of compensation via non-MLS mechanisms. READ THE STORY.
FRIDAY, AUGUST 16
4:07 p.m. ET: A BRAVE NEW WORLD: The weekend marks the deadline when NAR’s new commission settlement rules go into effect. The deadline has prompted a race to the finish line as multiple listing services update forms and issue stern warnings, while NAR scrambles to educate the public. Meanwhile, industry leaders are spending significant energy assuaging concerns while agents debate the impacts in online forums.
To understand what’s happening, Inman reached out to key players and agents across the U.S. Two takeaways from these conversations emerged: First, multiple listing services — which are tasked with actually implementing the new rules — have already been rolling out changes. And the apocalypse has not arrived.
But second, some in the trenches say confusion still abounds. As a result, real estate practitioners need to exercise caution. READ THE STORY. —Andrea V. Brambila, Taylor Anderson, Lillian Dickerson and Jim Dalrymple II
