How a Major Realtor Lawsuit Settlement Could Put Money Back in Your Pocket

A historic realtor lawsuit settlement is about to shake up the way Americans buy and sell homes. The National Association of Realtors (NAR) has agreed to pay $418 million in damages and fundamentally change how commissions work in real estate transactions. If you’re thinking about buying or selling a home soon, this shift could mean serious money in your pocket.

The Realtor Lawsuit Settlement That Changed Everything

For decades, the real estate industry operated under a commission structure that many argued was rigged. Last year, a landmark legal decision in the Sitzer/Burnett case hit the industry like a earthquake—a jury decided that the way agents shared commissions was actually inflating costs for everyone involved. The damages awarded? Nearly $2 billion.

Today’s realtor lawsuit settlement with NAR covers all these cases. The agreement, set to take effect mid-2024, forces a major reckoning: the end of an era where commission rates seemed set in stone. NAR has agreed to eliminate the requirement that sellers post buyer’s agent commissions on the Multiple Listing System (MLS)—the system that connects all real estate agents in a given area.

What does that mean in plain English? The old way is dying.

The Commission Changes That Could Save You Thousands

Here’s what used to happen: A home sells for $400,000. The total commission: $24,000 (that’s 6% of the sale price). The seller pays both their agent ($12,000) and the buyer’s agent ($12,000). The buyer never writes a check—it all comes out of the seller’s proceeds.

That system is about to change dramatically.

Under the new rules:

• Sellers will decide whether to pay the buyer’s agent at all
• If they choose not to pay, they can cut their total commission costs in half
• Both buyers and sellers can now negotiate commissions instead of accepting the standard rate
• Sellers can offer a flat fee instead of a percentage—or mix and match different arrangements
• Buyers might end up paying their agent directly (but they can also negotiate that fee)

For the first time in generations, the 6% real estate commission that’s been a fixture of home deals isn’t automatic anymore.

What This Means for Buyers and Sellers

For sellers: You have more control. You might pay less, or you might pay more if you’re competing in a hot market—but it’s now your choice. Some sellers will offer attractive buyer’s agent commissions to attract more offers. Others will go solo or offer less.

For buyers: You might have to start writing checks to your real estate agent. But here’s the silver lining: you can negotiate. You can shop around. You can even decide to skip an agent entirely and save the whole commission.

The settlement also requires that buyer’s agents provide written contracts spelling out exactly what services they’ll provide and what it will cost. No more ambiguity.

How to Navigate the New Real Estate Landscape

If you’re planning to buy or sell in this new environment, finding the right agent matters more than ever. According to real estate industry experts, the difference between a great agent and a mediocre one can be substantial. That experience and local market knowledge now directly correlates with the value you’re paying for.

Here’s what smart buyers and sellers are asking potential agents:

• What specific experience do they have in your local market?
• What services are they actually providing?
• How do they approach pricing strategies and negotiating terms?
• Can they explain why their fee is worth the investment?

The bottom line: if you’re paying for a service, there needs to be clear value in return. This settlement forces everyone to think about real estate commissions more carefully than ever before.

The realtor lawsuit settlement represents a genuine shift in power—away from industry-set standards and toward individual buyers and sellers making their own deals. Whether that’s good news for you depends entirely on how you navigate the new rules.