And So, A Chapter Closes…
If you have been a REALTOR® for more than two years, you probably know about the Sitzer-Burnett class action lawsuit and the $1.79 billion jury verdict that was entered against the National Association of REALTORS® (NAR) and several large brokerages. The plaintiffs were sellers who alleged that NAR and various real estate brokerages conspired to ‘fix’ and inflate commissions and to steer consumers toward properties that offered higher cooperative broker compensation.
As often happens, while NAR and the other defendants were considering whether or not to appeal the verdict, NAR was exploring settlement options with the plaintiffs’ attorneys. A settlement was reached, and it included several changes to real estate practices. The settlement changed how REALTORS® and other covered industry participants approach relationships with consumers, particularly buyer representation and buyer-broker compensation.
After the settlement terms were negotiated and the signatures were collected, the settlement was presented to the trial judge for final approval. Because this was a class action lawsuit, class members who were dissatisfied with the proposed settlement had the opportunity to file formal objections with the court, arguing why the settlement should not be approved. The trial court considered the objections that were presented and approved the settlement on November 26, 2024. Shortly thereafter, NAR made its first payment pursuant to the terms of the NAR Settlement.
Several of the objecting plaintiffs appealed the final approval to the United States Court of Appeals for the Eighth Circuit. The Eighth Circuit had the authority to overrule the approval of the NAR Settlement, which could have required renegotiating the settlement or further proceedings concerning the judgment, creating substantial uncertainty for the parties and the industry.
Meanwhile, NAR implemented the settlement-related practice changes on August 17, 2024. By the time the Eighth Circuit entered its decision, those changes had been part of day-to-day real estate practice for two years, and NAR had paid the first two settlement installments required by the NAR Settlement. Although NAR and others within the real estate industry expressed cautious optimism that the Eighth Circuit would affirm the final approval, there was an undercurrent of concern about the uncertainty the industry would face if the final approval was reversed.
On August 19, 2026, a panel of three judges from the Eight Circuit Court of Appeals unanimously affirmed the approval of the NAR Settlement. For REALTORS® and other industry participants, this decision provides greater certainty that the settlement-related practice changes will remain in place. While this does bring this chapter of changes to real estate to a close, there may be an epilogue. The objecting plaintiffs have limited options: (i) they can petition the three-judge panel to re-hear and reconsider the arguments; (ii) they can petition the full bench of the Eighth Circuit to hear the arguments and review the decision; or (iii) they can ask the United States Supreme Court to hear an appeal. As of September 1, 2026, nothing new has been filed.
What does this mean for you? The practice changes that were implemented as part of the NAR Settlement are still in place. First, offers of compensation from listing brokers to selling brokers continue to be prohibited from multiple listing services (“MLS”) that are subject to the settlement-related rule changes. Compensation can still be negotiated, but it cannot be offered or displayed through a covered MLS.
Second, if you are working on behalf of a buyer, the applicable MLS rules now generally require REALTORS® to have a written agreement with the buyer before touring a home. The written agreement can be an exclusive agency agreement, a non-exclusive agency agreement, or another written agreement between buyers and buyers’ brokers that:
- Clearly identifies the services that the consumer is hiring the REALTOR® to provide;
- Clearly and conspicuously identifies how much the broker will be paid OR how that fee will be calculated.
- Clearly states that the broker’s fee is fully negotiable and not set by law.
- Clearly states that the broker cannot receive compensation for its services that exceeds the fee negotiated between the buyer and the broker, from any source.
- Uses an objective method to calculate the broker’s fee, such as a specific dollar amount, a specific percentage of the price, or a specific hourly rate.
I am aware that there are several places in Pennsylvania where REALTORS® have not adopted this practice change, and some agents are NOT getting written agreements signed before touring homes with or on behalf of the buyers with whom they are working. If you are working with or for a buyer and do not get a written agreement signed by the buyer before you tour a property, you may be violating the terms of the NAR Settlement Agreement.
There are a couple of practical takeaways for brokers and agents. One, keep your practices for negotiating compensation and buyer representation current. Two, use clear, written agreements. Three, consult your brokerage and/or your MLS when compliance issues arise. The plaintiffs’ lawyers are currently verifying whether or not brokerages, agents, and MLSs are observing the terms of the NAR Settlement Agreement, and several subpoenas have been served in Pennsylvania. Don’t put yourself or your brokerage at risk; understand the settlement-related practice changes and follow the rules.
