Brokerage Position Statement Regarding NAR Lawsuit Settlement

I've been fielding many questions from friends, clients, colleagues, and the community about the recent NAR settlement. The following is an open letter sent to our brokerage associates, which may answer some of your questions as well. 
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​Date: March 28, 2024
Attn: One Nest Realty Brokers
 
There has been much public chatter about the NAR lawsuit settlement and the amount of false information circulated daily seems to be rising exponentially.
 
What does this mean for you and your clients right now?

• The Settlement will not be finalized until at least July; it is possible that timeline could be pushed out further.

 

• Until the Settlement is finalized, it is “business as usual” and NOTHING changes:

 
We will continue to operate with openness and transparency, in accordance with Federal and State laws, using State of Colorado Approved contracts for all transactions as per usual. This is how we have always conducted business, and will continue to do so.
 
As always, commissions are negotiable between you, your sellers, and your buyers. Section 7 of the State of Colorado approved Exclusive Right-to-Sell Listing Contract and Exclusive Right-to-Buy Listing Contract is one of the key reasons why the Lawsuit allegations are NOT applicable to us here in Colorado and why we were not included in those accused of malpractice. We have been openly negotiating and disclosing commission percentages and distributions all along.
 
It was recently stated (and parroted by many) “…for the first time, Americans can negotiate lower commissions when they buy or sell their home…” This is a lie, and should be considered professional slander. 
 
Is should be obvious to anyone who listens to the radio or has seen a billboard…adds for budget rates, fixed rates, flat rates, full-service rates, and everything in-between are prevalent. Despite the smear campaign and false statements, there are not fixed rates for real estate services. Not by NAR, CAR, DORA, or your Brokerage.
 
The counter argument I’ve been fired at with recently is “If rates aren’t fixed then why do so many agents charge the same thing?” Great question. Why are used cars of a similar caliber all around the same price? There are no fixed prices for cars, but you don’t see dealers giving them away for free. They typically price within a reasonable +/- margin of each other with varying value propositions and small concessions. That’s competition, not price fixing. As always, consider the work required for each transaction, present a fair value proposition, quote fairly, and your consumers will be happy they chose you and find value in the service you provide. 
 
If you need assistance fielding questions or concerns from the public (or even your clients) about commissions and real estate practices, you are welcome to refer them to me and I am happy to talk with them about our policies, procedures, and compliance practices. 
 
How the Settlement will affect you come July (presumed but nothing is final prior to Settlement approval)…

• Anyone who is a NAR member at the time Settlement is approved is covered under that settlement and protected from copy-cat lawsuits.

• Regardless of whether you maintain Realtor membership or not, you will be required to abide by the Settlement terms (see below) as long as you are a part of Re Colorado or any other MLS which is affiliated with NAR.

 
 What WILL NOT change for us in Colorado because of the Settlement…

• Seller’s have always had, and will continue to have…
  • the right to offer a co-op commission to a Buyer’s agent. This will not change.
  • the right not to offer a co-op commission to a Buyer’s agent. This will not change.
  • the right to shop around and get multiple listing quotes, negotiate costs, and choose the agent who best serves their needs and budget. This will not change.

 

• Agents have always had, and will continue to have…
  • the right to set their own commission rates and negotiate those to win a Listing.
  • the right to turn down a Listing if the Seller is not interested in paying their rates.
  • the right to share a portion of their commission with another agent, either as a referral fee or co-op commission.  
  • the legal requirement…
    • to disclose any and all sources of income for a transaction prior to entering into a contract
    • to disclose any Affiliated Business relationships
    • cannot take any compensation which is not disclosed
    • cannot take any compensation for referrals to lenders, title companies, or other Affiliated Businesses

 
What WILL change for us in Colorado because of the Settlement (presumed as fact but nothing is final prior to Settlement approval)…

• We have previously been allowed to openly publish in the MLS what (if any) co-op commission was being offered to a buyer’s agent; this was a pre-determined amenity offer by the Seller to entice buyers and the amount was transparently visible for all to see, ensuring fair dealings and easy audit by the public who had (until now) access to that information. If a seller wanted to check and see what other home owners were offering, they could do that. This was also frequently a source of negotiation, with all or a portion of the co-op amenity being waived as a Seller incentive to take the buyer’s offer.  

 
The Settlement is not taking away co-op commissions, but we will NO LONGER be able to publish this information into the MLS.
 
This will take away our ability to provide open-handed transparency, hides commission data from the public, and harms consumers’ ability to negotiate fair rates. There is no other word for this than stupid, and it goes against every ounce of common sense. I am increasingly concerned that these lawsuits are nothing but a money-grubbing catastrophe lining only the pockets of the attorneys and a few east-coast plaintiffs who’s beef has nothing to do with how we practice in Colorado. It makes me incredibly sad the public is being told they “won”, when in reality Coloradans have LOST on all front…consumer protection, access to data, negotiation tools.

• We have previously been allowed to show any member of the public any home at their request, no strings attached. We were allowed to show value and earn their business, without asking for up-front compensation and without asking them to sign a binding contract (as it should be). 

 
Per our current understanding, when the Settlement is finalized we will NO LONGER be able to show homes without first having the shoper sign a buyer representation agreement promising that if they buy the home it will be with us as their agent, and for a set price. *Please remember that nothing is set until the Settlement is finalized; my hope is that this issue may be mitigated by additional review and final Settlement terms. 
 
How does this help home buyers?!
 
Thanks to the (now wealthy) plaintiff’s attorneys working to protect the public from evil NAR, we have an open pandora’s box of consumer protection issues as shoppers are asked to sign legal contracts with agents they barely know before they can even view the product that is for sale.
 
Again, the public narrative is “look how protected we are, NAR is bad and this Settlement helps homeowners!” – not true.
 
The narrative that the NAR Settlement suddenly frees sellers from a fixed 6% commission obligation is false. That never existed, at least not here in Colorado, and no-where in the US legally. I maintain the strong opinion that this should have been a local issue and I’m incredibly angry that this has been allowed to turn into a national conversation, the consequences of which are harming our clients and our ability to conduct business in a fair and transparent manner.
 
It is incredibly important to remember that “While the terms of the settlement will impact CAR and local associations throughout the state, no REALTOR® associations in Colorado were ever named in a lawsuit or even alleged to have violated federal law.” gz.coloradorealtors.com/ap/EmailViewer/p0Jnnj2L
 
Rest assured that as a Managing Broker and Brokerage Owner I will be lending my efforts to flight this, educate the public, and protect our rights as Colorado brokers to serve our clients with integrity and transparency.  I am not alone in this. The Colorado Association of Realtors, Re Colorado MLS, and many others understand these concerns and the negative impact the Settlement terms could have on transparency and consumer protection. We will find solutions!
 
In the meantime, continue the good work you are doing with openness, transparency, honesty, and integrity. Charge fairly and work diligently to earn your client’s trust, business, and referrals. I’ll keep you posted when new information comes out. 
 
 
Salem Webb
Managing Broker / Owner
One Nest Realty
Based in Littleton, CO and serving greater Denver Metro
720-224-4929 | [email protected]
www.OneNestRE.com
 
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