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, October 31st and found NAR and other corporate defendants liable in the case. 

NAR had presented in court that its rules prioritize consumers, support market-driven pricing, and promote business competition. This matter is not close to being final as NAR will appeal the jury’s verdict. It will likely be several years before this case is finally resolved.   

For those looking for guidance on what to do “next,” the key message is all about continuing to provide consumers with Choice and Clarity.

Choice in terms of explaining all options people have when buying or selling a home. While we will continue to promote the value of using a REALTOR^®, discussing the various options they have in the marketplace, including the ability to go it alone, not only educates consumers but can be a helpful way to distinguish your value and services offered should they choose to work with you.

Clarity in terms of explaining what you charge in exchange for the professional services you will provide, and the methods by which you could be compensated. For buyers, this includes paying for your services directly plus options to obtain some or all of that fee through other means, such as offers of compensation from a listing broker – all of which would be specified in your buyer’s representation agreement. For sellers, this includes their 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 – all of which would be specified in your listing agreement.

Most importantly when discussing compensation – regardless of your chosen model, method, or amount – be sure to explain that buyer brokerage services are not “free,” that there is no set or standard rate of compensation, and that commissions are and have always been negotiable.

• 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.

• 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.

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

How to Explain Real Estate Compensation to Clients Resources:

• NAR President Tracy Kasper discusses the verdict in the Burnett et al v. NAR et al case and provides high-level guidance to help REALTORS® understand and communicate about the verdict: CLICK HERE

• How Commissions Work: CLICK HERE 
• NAR ongoing updates about the DOJ Lawsuit: CLICK HERE