11/8/2023: New guidance to communicate about the Burnett v. NAR trial verdict with your clients

NAR President Tracy Kasper has provided some additional, high-level guidance to help our REALTOR members communicate about the Burnett v. NAR trial verdict with your clients. She encourages you to keep sharing with your clients and communities the value you as REALTORS® provide, day in and day out. Additionally, we would also like to bring to your attention an NPR story that provides a balanced/neutral perspective on the recent verdict.

What does this mean for me and my business?

• We all should continue to express that commissions are negotiable and set between a broker and their client.
• As always, it is critical to maximize transparency with your clients about their choices and your terms.
• Continue to use your listing and buyer agreements to help them understand 1) exactly what services and value you are providing and 2) how much you charge.
• For buyers, this includes options for offers of compensation from a listing broker or paying for your services directly or a combination.
• For sellers, this includes options to allow offers of compensation to be made by their listing broker to a buyer’s broker, and if so, how much and under what terms.

What should I tell my clients who ask me about the verdict or lawsuits?

• The National Association of REALTORS® believes that the jury reached an outcome that is neither supported by the law nor the facts presented in the case and plans to appeal.
• The trial had to do with a very pro-consumer rule for local MLS broker marketplaces where listing brokers make offers of compensation to buyer brokers who identify someone who wants to buy the sellers’ home.
• Those offers can be any amount, can vary over time, are based on things like service and the market, and are negotiable. Neither the buyer nor seller broker gets paid until the home sale and purchase close based on what the seller and buyer have agreed to in writing.
• The offer of compensation practice ensures efficient, transparent and accessible marketplaces where sellers can sell their home for more and have their home seen by more buyers while buyers have more choices of homes and can afford representation.
• Plaintiffs have said wealthy people could still afford representation without the practice, but that hardly seems fair. The National Association of REALTORS® is going to continue to advocate for this pro-consumer practice and, as noted, plans to appeal the jury’s verdict.
• Know that agents who are REALTORS® will still and always be there for clients to guide you through the financial, legal and community complexities of buying and selling a home.
• The verdict doesn’t change the many choices buyers and sellers have when deciding whether to hire a real estate agent who is a REALTOR®. Compensation will continue to be negotiable and set between a broker and their respective client, as it always has been.
  

What can I do to help?

• It’s so important that as real estate agents who are REALTORS®, we continue to demonstrate the real value we bring as we guide consumers through the financial, legal and community complexities of buying and selling a home.
• There are so many great resources at the REALTORS® as Champions section of the competition.realtor website, including infographics you can reference, post and share: 
• Buying a home is easy if you work with a REALTOR®
• Selling a home is easy if you work with a REALTOR®
• Why hire an agent who is a REALTOR®
• The essential real estate agent

By now you’ve likely seen the news that, after an 11-day trial in the case of Burnett v. NAR et al, the eight-person jury in a Kansas City, Mo., federal courtroom came back Tuesday and found NAR and other corporate defendants liable in the case. 

We have consolidated the information that’s been published by NAR and your state associations in response to the verdict for your quick reference:

D.C. Association of REALTORS®

Maryland REALTORS®

National Association of REALTORS®

Additionally, NAR has put some information together to address questions you may have at this point, which you can find below. Please visit the Competition.Realtor website for information that you can share with your clients on how REALTORS® and local MLS broker marketplaces benefit consumers.

Finally, remember that this trial is not yet final - NAR intends to appeal. For that reason, please be mindful that any commentary you post online could potentially be used as evidence in further litigation.

Questions and answers from NAR

What are next steps legally and the timing?
This matter is not close to being final as we will appeal the jury’s verdict, and we remain confident we will ultimately prevail. In the interim, we will ask the court to reduce the damages awarded by the jury. Due to the nature of appeals, this case likely will not be concluded for several years. 

What will be the basis for NAR’s appeal?
We can’t speak to the specifics of that until we file our appeal, but we can say that we have a very strong legal basis for appeal.

Is there anything REALTORS®, brokers, state/local associations or MLSs need to do differently because of this verdict?
Not because of this verdict. But NAR has emphasized for many years two important things. One is the use of buyer representation agreements, which maximize transparency by putting all agreements in writing to ensure clarity and understanding, as all members are obligated to do pursuant to the NAR Code of Ethics. These agreements formalize the professional working relationship with clients and detail what services consumers are entitled to and what the buyer agent expects from their client in return. Second, it’s also an imperative for members to continue to express that commissions are negotiable and set between brokers and their clients; explain how local MLS broker marketplaces promote equity, transparency and market-driven pricing for consumers; and persistently communicate the incredible value agents who are REALTORS® provide. 

What does the future of buyer representation look like as a result of the verdict?
This verdict does not require a change in our rules, but if class action attorneys had it their way, buyer representation would be very much at risk because many first-time home buyers, among others, couldn’t afford to pay for representation out of pocket. It’s important that members take every opportunity to express how they are experts who guide consumers through the financial, legal and community complexities of buying or selling a home.

Does NAR have the funds to pay the proposed damages or post a bond to file an appeal?
NAR is going to appeal and has the funds to post bond, which allows us to proceed with our appeals and defer potential payment of damages. While appeals will take years, and we are confident we will ultimately prevail, we also are financially prepared for any final judgment.

How does this verdict affect other ongoing litigation, including the other seller lawsuit?
It doesn’t. Cases are tried separately, and we remain confident we will ultimately prevail because we have a strong case we’ll present on appeal and because our rules are pro-consumer and pro-business competitive.

Is there any scenario where NAR would consider settling?
NAR always has been open to a resolution that maintains a way for buyers and sellers to continue to benefit from the cooperation of real estate professionals and eliminates our members’ risk of liability for the claims alleged. That being said, we remain confident we will prevail on our appeal. 

Would NAR ever consider changing the cooperative compensation rule?
This rule always has been in place to protect and serve the best interests of consumers, support market-driven pricing and advance business competition. NAR consistently reviews and considers evolving its rules in a way that responds to changes in the industry and what best serves consumers. 

Do you expect the plaintiffs to seek an injunction that would require NAR to stop making the rule mandatory or eliminate the rule altogether? 
We cannot predict what plaintiffs will do.  We would contest any such effort because this rule always has been in place to protect and serve the best interests of consumers, support market-driven pricing and advance business competition.

What’s the status with the Department of Justice and has anything changed with this verdict?
We reached an agreement with the DOJ nearly two years ago. NAR has upheld our end of the agreement, and we expect the DOJ to do the same as affirmed by a federal court’s careful ruling. That is a separate matter from the case of Burnett v. NAR et al.