Real Estate News

 

Updated: Timeline of the Broker Compensation Dispute

10/26/2023

 

Updated December 19, 2023

Late 1800s – Real estate brokers and boards popularized the use of multiple listing services throughout the United States to share information about their listings.

May 12, 1908 – The National Association of Real Estate Exchanges (now, the National Association of REALTORS®) was founded in Chicago, Illinois.

1913 – NAR established the REALTOR® Code of Ethics.

1913 – NAR, wanting to protect the interests of homebuyers, introduced the commission-split structure: where when a Seller sells a home, that Seller pays a percentage of the sales price to the seller’s agent, who then shares a portion of that percentage with the buyer’s agent, if any.

1920s – Rapid development and increasing usage of MLS services.

1983 – A study by the Federal Trade Commission revealed that around 72% of homebuyers wrongfully believed that listing agents and subagents represented the buyer’s interests. As a result, agency disclosure to consumers became mandatory.

1985  - NAR began advocating for laws to protect buyer agency.

November 1996 – NAR updated their Cooperative Compensation policy to prohibit MLS services from publishing listings that do not express an offer of compensation as either a percentage or a definite dollar amount.

November 2004 – NAR updated their Cooperative Compensation policy to require participants to make “blanket unilateral offers of compensation” to other MLS participants.

July 1, 2012 – The Virginia legislature updated VA Code § 54.1-2137(B) to require that brokerage relationships, including buyer agency relationships, be in writing.

March 6, 2019 – Moehrl v. NAR - Home-sellers in the Northern District of Illinois filed a class action lawsuit against NAR and various large real estate brokerages in federal court alleging that the practice of cooperative compensation is unfair to sellers, artificially inflates home prices, and violates federal antitrust law.

April 20, 2019 – Burnett/Sitzer v. NAR – Home-sellers in Missouri filed a class action lawsuit against NAR and various large real estate brokerages in federal court alleging that the practice of cooperative compensation is unfair to sellers, artificially inflates home prices, and violates federal antitrust law.

November 2019 – NAR adopted the Clear Cooperation Policy, mandating that REALTORS® submit listings to the MLS within one business day of public marketing.

April 2022 – Burnett/Sitzer v. NAR was certified as a class-action lawsuit.

March 2023 – Moehrl v. NAR was certified as a class-action lawsuit. Trial is expected sometime in 2024.

August 9, 2023 – Bright MLS changed its Cooperative Compensation policy to allow for listings to offer compensation to buyers’ agents as low as $0. It had previously allowed for compensation to be offered as low as 1¢.

September 5, 2023 – Anywhere Real Estate, Inc. announced it had reached settlements in both the Burnett/Sitzer and Moehrl cases. Settlement details are awaiting final approval from the court, likely mid-2024.

September 18, 2023 – RE/MAX, LLC announced it had reached settlements in both the Burnett/Sitzer and Moehrl cases. Settlement details are awaiting final approval from the court, likely mid-2024.   

September 18, 2023 - Plaintiffs moved to dismiss their claims arising under Missouri state law, including their claims pursuant to the Missouri Merchandising Practices Act (MMPA) (Count II) and the Missouri Antitrust Law Mo. Rev. Stat. § 416.031 (Count III). Plaintiffs kept their federal claims involving the Sherman Antitrust Act (Count I) against NAR and the other defendants.

October 31, 2023: A verdict was reached in Burnett/Sitzer v. NAR. The jury found NAR and the co-defendant brokerages guilty of violating antitrust law and conspiring to fix real estate commission rates throughout the country through the use of NAR’s Cooperative Compensation policy. NAR plans to appeal pending the court’s final order.

October 31, 2023 - Present: In response to the Burnett/Sitzer verdict, numerous copycat lawsuits with similar allegations were filed throughout the country on behalf of various groups of homesellers against NAR and other large brokerages, MLSs, and Realtor® associations. These lawsuits are in: Missouri, South Carolina, Georgia, New York, Pennsylvania, Florida, and Texas. 

 

 

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