NAR Litigation Update on DOJ Case

On March 25, 2023, the Department of Justice (DOJ) filed a notice of appeal in an appellate court seeking to overturn the federal judge’s original decision from January ruling that the DOJ cannot go back on its previous agreement with NAR. This filing was expected and it will take time before the litigation is fully resolved. Regardless of the DOJ’s appeal, we remain confident in our position and that we will ultimately prevail. As stated in the court’s original decision “…not setting aside the CID at issue would deprive NAR of the benefit for which it bargained: the closure of the Antitrust Division’s investigation into its Participation Rule and Clear Cooperation Policy. The government, like any party, must be held to the terms of its settlement agreements…“

As you know, NAR has a commitment to act in the best interests of home buyers and sellers across the country and remains dedicated to advancing independent, local real estate marketplaces that provide for greater economic opportunity and equity for small businesses and consumers of all backgrounds and financial means. 

We will keep you informed of any notable milestones, but in the meantime, please refer to the Competition.Realtor website, which provides a comprehensive overview of how REALTORS® and local MLS broker marketplaces benefit consumers. There are three recently uploaded new infographics there. Additionally, we highly encourage the continued use of Buyer Representation Agreements in order to formalize a working relationship with clients and detailing what services consumers are entitled to and what the buyer broker expects from their client in return.

Also please review this recent article from NAR’s 2021 President, Charlie Oppler, which provides a smart perspective on the situation with the DOJ and the FAQ below.

FAQ

What is happening with NAR and the Department of Justice (DOJ)?

In January 2023, a district court decided the DOJ must adhere to its previous agreement with NAR to more explicitly state the spirit and intent of NAR’s Code of Ethics and MLS guidelines in certain key areas. In fact, NAR has already adopted clarifications to its guidance for local MLS broker marketplaces to strengthen transparency for consumers. Ultimately, what NAR and the federal government both desire is a better experience for consumers.

 How will this have an impact on other ongoing litigation?

The ruling should have no bearing on other, ongoing cases, and we remain confident that we will prevail in all instances. Local broker marketplaces and the associated guidelines promote a pro-consumer market for home buyers and sellers and a pro-competitive environment for businesses of all sizes, especially and including small business. 

What are the benefits of NAR’s agreement with the DOJ, and why did the DOJ attempt to walk back from an agreement that was mutually acceptable?

The changes reinforce that local broker marketplace participants do not represent brokerage services as free, ensure disclosure of compensation offered to buyer agents, and ensure listings aren’t excluded from search results based on the amount of compensation offered to buyer agents. We cannot speculate on the thinking of the DOJ. We can say that in 2020, we entered into a fully negotiated settlement agreement that was approved by the head of the Antitrust Division. And in 2021, after we had begun to implement the terms of that agreement, they tried to back out of the agreement.

If the agreement gets upheld in court, will non-REALTORS®/the industry experience any effects? If so, how? 

The effect would be simple: a continuation of an approach that works. Local MLS broker marketplaces and associated guidance by NAR have long been recognized to advance fair and competitive real estate markets while providing equitable economic opportunities for home buyers and sellers.