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Real Estate - Residential

Wilmington-based Realtors Share Views On NAR Settlement Agreement

By Cece Nunn, posted Mar 29, 2024

It was time to move on, said Trey Wallace, president of Wilmington-based Intracoastal Realty Corp. 

He was referring to the $418 million settlement, announced March 15, reached between plaintiffs and the National Association of Realtors in a case centered on the industry’s commission practices. According to one of the law firms representing the plaintiffs, Chicaga-based Hagens Berman, the agreement “would resolve antitrust claims against NAR” in a suit that alleged it conspired with the largest broker franchises “to artificially inflate commissions associated with home sales.”

The settlement is subject to court approval.

"The settlement, which is subject to court approval, makes clear that NAR continues to deny any wrongdoing in connection with the Multiple Listing Service (MLS) cooperative compensation model rule (MLS Model Rule) that was introduced in the 1990s in response to calls from consumer protection advocates for buyer representation," according to an NAR release March 15. "Under the terms of the agreement, NAR would pay $418 million over approximately four years."

Wallace and other local Realtors recently weighed in on the news.

Wallace said in a recent email that it was time to move on because “it was apparent from all the copycat lawsuits around the country that this would drag out for another decade or more. This settlement will bring more transparency around the country about different value offerings from brokerages and how we are compensated.”

Wallace and other Realtors said the crux of the lawsuits had been a much bigger issue in other parts of the county than in the state of North Carolina.

According to officials with Wilmington-based Coldwell Banker Sea Coast Advantage, “While the terms and details of the settlement present adjustments that the real estate industry will have to navigate moving forward, some of the proposed actions were already in place in North Carolina or can be smoothly integrated in the current transaction procedures.”

A release from Sea Coast said critical points in the settlement include:

  • Written buyer representation agreements will be mandatory for all buyer’s agents before showing the property to potential buyers. North Carolina already utilizes buyer agency agreements.
  • Beginning in mid-July, compensation offers will no longer be displayed in the MLS if the settlement is approved. While this change will remove the mandatory nature of cooperative compensation, it does not prohibit sellers from offering compensation to buyers’ agents. However, the compensation must be disclosed differently, most likely via standardized form(s) compiled by the NC Real Estate Commission. In addition, clear communication between listing and buyer’s agents will be paramount.

“Coldwell Banker Sea Coast Advantage has always prioritized the goals of buyers and sellers, and we believe that professional representation is important for both sides of the transaction. Offers of compensation ensure that services are available to all and increase fair housing opportunities as well as the potential buyer pool,” the statement said.

The local statement also said Sea Coast encourages its clients to discuss commission structures with their agent “so that they fully understand the options available and make informed decisions.”

Change is inevitable, said Denise Kinney, president of Coldwell Banker Sea Coast Advantage.

“I am confident in our agents’ ability to adapt and thrive under these changing conditions,” Kinney said. “We will continue to provide buyers and sellers with the highest level of local knowledge and market expertise.”

Amanda Parmer, president of Wilmington-based BlueCoast Realty Corp. and this year’s president of Cape Fear Realtors, said it’s a Realtor’s responsibility and duty “to be the voice of real estate for our clients and our community.”

According to a CFR statement, the organization recommends visiting NAR’s website for information about the proposed settlement.

NAR is “working with communication and legal professionals to produce resources to answer your questions, guide your conversations, and bring you clarity around this proposed settlement. For the most updated information, please go to facts.realtor or competition.realtor to better understand what this proposed settlement means.”

CFR is having conversations with those "who are leading the innovative next steps around this conversation. Since the settlement is only a proposal and must be approved by the court, it is important that we act intentionally moving forward. CFR will continue equipping its members with information, classes and resources as we know the full impact of this proposed settlement on our local industry.”

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