I have been pretty quiet online about some real estate commission lawsuits and the proposed settlement by NAR, the National Association of REALTORS(R).

I have, though, been involved in private discussions about what the commission lawsuits have been about and what the NAR proposed settlement can mean to Baltimore homebuyers and sellers.


The first thing to understand is that NAR’s proposed settlement is just that – proposed. My understanding is that it would have to be approved by the court and the DOJ may weigh in on it and adjustments may have to be made.

Should the court accept the proposed settlement from NAR, any changes could come into effect beginning July 2024.

Backing up, what were the lawsuits about?

My understanding is that some past home sellers filed multiple lawsuits against NAR and a few large brokerages across the US, arguing that the NAR’s rules regarding homes listed for sale on their affiliated owned Multiple Listing Services made agent commissions higher than they felt they needed to be.

NAR had a longstanding policy of “clear cooperation” between brokers and agents. My understanding is that this was to level the field between brokerages, that compensation should be for agents who contractually work on an agreed contract between a home buyer and home seller.

What is not clear, and I have not seen much in the reporting on the matter, is that historically, in Maryland at least, any compensation offered by a seller for each house could be different. In Maryland, at least, some compensation could possibly be paid to a buyer’s agent through the seller’s listing agreement, but my understanding has been that it was not required. In Maryland, currently, and recently, if an agent were contractually representing a buyer, there needed to be a written buyer agency agreement where compensation is laid out. In Maryland, if the seller on a house the buyer put an offer on were to be offering a buyer’s agent commission, the buyer’s obligation to pay their agent could potentially be reduced by whatever amount the seller agreed to pay, depending on what the two agreements stated. Each listing agreement or buyer agreement contract may be different. **PLEASE NOTE – REAL ESTATE FORMS CAN AND HAVE CHANGED. WHAT MAY HAVE BEEN IN FORMS YEARS AGO MAY HAVE CHANGED IN MORE RECENT YEARS.**

I want to clarify that the above paragraph is Maryland specific, because my understanding is that part of the confusion on the part of some of the home sellers that may have been involved in the class action lawsuit is that it appears that not all states may have spelled in their agreements out how the compensation the seller agreed to may have been distributed. I am not currently licensed in other states than Maryland at the moment, so I do not have access to those agreements. I am trying to understand the confusion and what I believe I understand from what has transpired.

So, what does this mean? Well, right now, things are uncertain. Again, this is currently just a proposed settlement.

Here is a link to the NAR’s “settlement fact sheet” and a link to the NAR settlement proposal.

NAR’s proposed settlement appears to remove buyer agent compensation offers through the MLS, so buyer agents would potentially need to take extra steps to find out if there is compensation to a buyer’s agent offered by a seller of a property.

NAR’s proposed settlement appears to require buyer agency agreements to be signed prior to viewing properties if a buyer were to be represented by an agent.

There are a lot of sensational headlines out there and many of them appear to have potentially incorrect information in both the headlines and the articles.

For me, I am continuing to help buyers and sellers in the Baltimore area and will adjust as needed when changes occur.

If you are considering buying or selling a home in Baltimore or the Greater Baltimore area, please contact me. I would love to be of service.

**Again, please note that I am not an attorney and nothing in the above post should be considered or interpreted as legal advice or legal analysis. Please review the NAR proposed settlement fact sheet and full settlement proposal. Both documents are linked in the post above.**