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Justice Department Raises Concerns Over Proposed $418M Settlement in Realtors Case

By  |  November 26, 2024
house with sold sign

The U.S. Justice Department has flagged potential antitrust issues in a proposed $418 million settlement involving the National Association of Realtors (NAR), warning that certain provisions could stifle competition among real estate brokers. The settlement, tied to a class-action lawsuit over home sales commissions, has sparked significant debate ahead of its final approval hearing.

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    The class-action lawsuit challenged the longstanding practice of requiring home sellers to pay commissions to buyer’s agents in order to list their properties. Under the terms of the settlement, the NAR has agreed to discontinue this practice and make reforms to its commission rules. However, the Justice Department, which is not a party to the case, expressed concerns in a “statement of interest” submitted to U.S. District Judge Stephen Bough in Kansas City, Missouri. According to Reuters, the statement highlighted that a proposed requirement for buyers and their brokers to sign written agreements before touring homes could limit broker competition.

    Read more: Court Gives Green Light to $110M Deal in Real Estate Commission Dispute

    The Justice Department’s intervention comes as Judge Bough prepares to consider final approval of the settlement during a hearing scheduled for Tuesday. Lawyers for the plaintiffs and the Justice Department have not yet commented on the matter, Reuters reported.

    In defense of the settlement, the NAR issued a statement on Monday asserting its commitment to securing final approval. The organization previously agreed in March to the $418 million settlement, which followed a $1.8 billion jury verdict against the association and other defendants in October. The case has since prompted several individual brokerages to settle related claims.

    The lawsuit, formally titled Rhonda Burnett et al v. National Association of Realtors et al, represents hundreds of thousands of home sellers seeking changes to industry practices.

    Source: Reuters