The NAR lawsuit has been one of the most consequential legal battles in U.S. real estate history, reshaping how agents, buyers, and sellers interact in the housing market. As of 2025, the settlement has introduced sweeping reforms, required new practices, and invited additional scrutiny from the Department of Justice (DOJ). For homeowners, buyers, and real estate professionals, understanding this lawsuit is not optional—it is essential. In this comprehensive guide, we will explore what the lawsuit was about, the terms of the settlement, the rule changes already in effect, and what lies ahead in 2025.
What Is the NAR Lawsuit?
The NAR lawsuit refers to a series of class-action cases challenging the long-standing commission structures enforced by the National Association of REALTORS® (NAR). At the heart of the dispute was the rule that sellers were required—or at least strongly incentivized—to offer compensation to a buyer’s broker through Multiple Listing Services (MLS). Plaintiffs argued that this practice unfairly inflated commissions, limiting competition and forcing sellers to shoulder unnecessary costs.
Cases like Sitzer/Burnett and Moehrl v. NAR gained national attention, with billions in potential damages at stake. The lawsuits claimed that collusion between large brokerages and NAR policies amounted to anticompetitive behavior. For decades, commission rates in the U.S. hovered around 5–6%, significantly higher than in other countries, and the plaintiffs saw this as evidence of systemic distortion.
The Settlement: How Much and What Changed
In 2024, NAR agreed to a multibillion-dollar settlement. The figure, while historic, was less impactful than the practice changes that came with it. Settlement funds were set aside for eligible sellers who paid buyer-broker commissions during specific time frames, with a claim deadline in May 2025.
The bigger story, however, lies in the rule changes. These reforms sought to dismantle the old commission model and introduce transparency into how agents are compensated. By shifting negotiations into the open, the settlement aimed to give both buyers and sellers more control.
Rule Changes Buyers and Agents Must Understand
Beginning August 17, 2024, one of the most important provisions took effect: written buyer-broker agreements became mandatory before touring a home. This meant buyers could no longer casually work with agents without formally agreeing to compensation terms.
Key points in these agreements include:
- The exact services the broker will provide.
- How the broker will be compensated.
- Whether compensation will be paid by the buyer directly, by the seller through concessions, or through another negotiated method.
Additionally, MLS rules changed so that listing agents and brokers can no longer advertise blanket offers of buyer-broker compensation. Instead, compensation must be disclosed directly and negotiated case by case.
Timeline of Critical Dates
Several dates have shaped the lawsuit and its impact:
- August 17, 2024: Buyer-broker agreement requirement took effect.
- November 27, 2024: Court granted final approval to the settlement, although appeals followed.
- May 9, 2025: Deadline for filing claims passed, closing the window for eligible sellers to seek compensation.
- January 13, 2025: The U.S. Supreme Court allowed the DOJ to continue its investigation into NAR policies.
While the settlement has technically been approved, ongoing appeals and government oversight mean the story is not yet over.
Appeals and Why the Settlement Isn’t Fully Final
Though the settlement received final approval in late 2024, several appeals were filed by parties dissatisfied with the terms. Appeals can slow down or even reverse elements of the deal, meaning distributions to class members remain on hold.
For sellers who filed claims, this means patience is required. Courts may take months, even years, to resolve these challenges. For brokers and agents, compliance with new rules is mandatory regardless of appeals, since rule changes have already been implemented nationally.
DOJ vs. NAR: The Government’s Role
Separate from private lawsuits, the DOJ has taken an active role in investigating NAR’s policies. In January 2025, the Supreme Court cleared the way for the DOJ to reopen its antitrust probe, signaling that the settlement may not be the last word.
The DOJ is particularly interested in ensuring that NAR’s new rules genuinely promote competition rather than disguising old practices in new forms. Potential outcomes could include additional restrictions, stricter disclosure requirements, or even broader reforms to real estate governance.
Market Impact: Are Commissions Falling?
One of the most closely watched questions is whether the NAR lawsuit has actually lowered commissions. Early 2025 data suggests that while commission structures are shifting, the decline is gradual. Some markets are seeing sellers offer less toward buyer-agent compensation, while others remain close to historical averages.
Why the slow change? Old habits, limited consumer awareness, and ongoing negotiations all play a role. That said, new models—such as flat-fee services, rebates, or à la carte buyer representation—are gaining traction. Over time, experts predict that average commission rates will align more closely with international norms.
What Sellers Should Do in 2025
If you are selling a home in 2025, here’s what you need to know:
- Review your listing agreement carefully. Ensure it reflects post-settlement rules.
- Understand buyer-agent compensation. You are no longer obligated to offer commission upfront, but strategic concessions may still help attract buyers.
- Ask the right questions. How does your listing agent plan to market the property under new compensation rules?
By adjusting expectations and negotiating terms, sellers can retain more equity while still appealing to qualified buyers.
What Buyers Should Do in 2025
Buyers face new responsibilities as well. Since written agreements are now required, you must take time to evaluate what services you want from an agent and how much you are willing to pay.
Practical tips:
- Shop for agents. Compare not just fees but also experience, responsiveness, and negotiation style.
- Negotiate your agreement. These documents are flexible; you can agree to hourly rates, flat fees, or capped commissions.
- Plan for financing. Since some loans may not cover agent fees directly, discuss options with your lender early.
For buyers, these changes mean greater transparency but also more upfront planning.
Compliance Checklist for Agents and Brokers
For real estate professionals, the settlement brought a compliance challenge. Brokers must:
- Adopt written buyer-broker agreements with mandatory disclosures.
- Remove blanket compensation offers from MLS platforms.
- Update training materials, scripts, and compliance protocols.
Failure to comply could expose brokers to legal risk or disciplinary action. Forward-looking firms are already leveraging the changes to market themselves as transparent and consumer-focused.
Risks, Scams, and Where to Get Reliable Updates
With billions at stake, scammers are taking advantage of confusion. Some homeowners have reported fraudulent settlement emails or fake refund offers. Always verify through the official settlement administrator website or through your attorney before responding.
NAR itself has issued FAQs and guidance, but keep in mind that appeals and DOJ actions mean information is constantly evolving. Reliable updates are typically available from court filings, major news outlets, and official NAR communications.
Conclusion: What the NAR Lawsuit Means for the Future
The NAR lawsuit is more than a legal battle—it represents a turning point for American real estate. By forcing changes to entrenched commission practices, the settlement is opening the door to greater transparency, competition, and consumer choice.
Yet, the story is still unfolding. Appeals could reshape financial relief, and the DOJ’s investigation could bring further reforms. For buyers, sellers, and agents, the best strategy in 2025 is to stay informed, read every agreement carefully, and recognize that the rules of the game have permanently changed.
Whether you are planning to buy, sell, or work in real estate, the NAR lawsuit will affect your bottom line. Understanding it today ensures you won’t be caught off guard tomorrow.
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