Most of you are probably aware of the major lawsuit filed against the Realtors and several large companies. There is talk about the way this is going to impact how real estate is sold. Here is some information on the local implications.
Recent Court
Decisions in Real Estate November 2023
So what happened?
A jury came to a decision on Sitzer/Burnett v. NAR, et al.; this resulted in a $1.8 billion jury verdict in a home seller’s class action lawsuit in Missouri against NAR and several large franchisors based on a mandatory NAR rule that requires the seller, via the listing broker, to offer compensation to the buyer’s broker.
Why is our market different?
Since 2019, Northwest MLS (NWMLS) has spearheaded initiatives that afford buyers and sellers more information about broker compensation in their transaction and clear opportunities to negotiate their broker’s compensation. Unlike other MLSs, the NWMLS has been taking steps for many years to create a system that provides buyers and sellers with choice, negotiation opportunities and transparency of broker compensation.
· The Northwest Multiple Listing Service (NWMLS) is not affiliated with NAR.
· In 2019 the NWMLS eliminated the mandatory compensation rule for listings.
· In 2019 the NWMLS was the first MLS in the country to publish the amount of compensation offered to the buyer’s broker.
· In 2022 the de-coupling of compensation by the NWMLS.
· “De-coupling” broker compensation, meaning that any compensation the seller chooses to offer the buyer broker is set and paid by the seller—not the listing broker.
· Any compensation the seller chooses to offer to the buyer broker is prominently stated on the first page of the purchase and sale agreement, with an opportunity for the compensation to be accepted by the buyer and the buyer’s broker or separately negotiated by the parties.
· 2024 will begin with substantial changes to Agency Law.
· Requiring buyer brokerage service agreements.
· Changing the term “dual agent” to “limited dual agent”.
· Require buyers and sellers to separately initial consent to an individual broker acting as a limited dual agent.
· Requiring disclosure by firms of any compensation offered to the firm by another party. The NWMLS revised the statewide purchase and sale to accommodate this requirement.
· Simplifying the Law of Agency Pamphlet for better understanding by the public.