Darryl Davis explains what reconciliation is, why it’s important, and what, if anything, it would actually change in the way we work.
You’ve probably already seen the headline about the National Association of Realtors reaching a $52.25 million settlement.
and committee litigation. Another big number.
Unfortunately, NAR is once again not clear on what this means for you, the individual agent sitting at your kitchen table. So let’s fix that. Here, we’ll demystify what this settlement is, why it’s important, and what it will actually change in the way you work.
What is this settlement?
NAR agreed to settle a lawsuit called Tuccoli v. At World Properties, contributing $52.25 million to a fund to resolve claims from homebuyers. The buyer’s argument is essentially the same as the seller’s argument in Sitzer-Barnett. In other words, the commission structure in real estate means that it costs more than it should. NAR denied any wrongdoing throughout the case, but agreed to contribute to its resolution.
The settlement still needs a judge’s approval. A final court hearing is scheduled for July 28, and the case has not yet been officially heard.
What is the difference between this and Barnet’s Settlement?
Remember when many brokerages and MLSs felt left out of their contracts with Barnett unless they paid a separate fee to receive coverage? This was structured differently.
This applies to intermediaries whose principals are real estate agents who have not yet been named in buy-side litigation, and there is no minimum volume requirement. State and local real estate agent associations are eligible. Both NAR affiliated MLSs and non-real estate agent MLSs are eligible. This last group was not protected in the Barnet settlement, and its omission caused much discontent at the time.
Congratulations to NAR CEO Nykia Wright and her legal team. The Barnett settlement caused real confusion among members under NAR’s previous leadership. Brokers and MLSs were left stranded and confused, and many had to pay separate fees to receive compensation.
This settlement is the opposite. It was built to protect more people more broadly, without transaction volume requirements or extra hoops to jump through. It’s not an accident. That’s a defense team that actually stepped up to bat for membership, and that deserves recognition. Broader protection means more stability for professionals building businesses within this industry. That’s important.
Will this change the way I practice?
The answer is no. The settlement does not introduce any new rules. The practice changes that took effect on August 17, 2024 remain the norm, and this settlement simply requires continued compliance with the same changes. Nothing new has been added.
As a quick reminder, these changes require:
Sellers and buyers should be clearly informed that fees are not mandated by law. You can set your rates and stick to them. It just needs to be made clear that the fees are not set by law. What fees to charge is an individual business decision of each Agent and/or Broker. Before showing a property to a buyer, you must have a written buyer representation agreement in place. The only exception is if the buyer attends an unrepresented open house. Compensation should be discussed up front, not after the relationship begins.
If you adjust your practices when these rules are announced in 2024, you will have already done everything necessary for this settlement. Nothing about your daily changes.
What this means for you now
The biggest legal threat to the buy side is nearing reality.
If the settlement is approved by the court in July, it will complete one of the most significant outstanding cases involving the broader industry. The agent has been running in the cloud for two years. The clouds are starting to clear.
A buyer agreement is not a temporary inconvenience. that’s the new normal
Some agents are still waiting for the situation to return to its previous state. they’re not going to do that. Written buyer contracts, up-front value discussions, compensation discussions before the first showing, that’s just how real estate works now. Agents who are used to it are already ahead of those who are not.
Your intermediary is probably protected
If your broker has a real estate agent as principal and is not named in the buy-side lawsuit, you likely qualify for this settlement. This is a real relief for agents who were secretly worried about their legal standing.
What buyers think about fees is still a question to be resolved
Two years of headlines told buyers they were being overcharged. Even if there is reconciliation, the bell will not stop ringing. If you sit across from a buyer and they bring up the fee, the court ruling won’t explain it for you. That conversation belongs to the agents in the room, and how you handle it can either build trust or damage the relationship.
“Settlement changes the legal landscape. It doesn’t change the conversation you need to have with the next buyer. You’re still the one leading it.”
— Darryl Davis
One more thing to note
Lawyers behind another set of buyer lawsuits, known as the Baton lawsuits, are actively fighting to prevent brokers from participating in the Tuccoli settlement. This is because the lawyers hope to sway the members. NAR is monitoring it closely.
If such opposition gains momentum, the schedule may be pushed back. July 28th is an important day. Until then, this is a settlement still awaiting a judge.
Here’s what you really need to understand from all of this: The industry is moving towards a solution. The rules will not change again. Your brokerage business may be protected. And the conversation with the buyer about value and compensation still rests entirely on your shoulders.
That last part is actually good news, although it doesn’t always feel that way. Because agents who know how to speak with confidence and clarity will be the ones who will build the strongest businesses in this new environment.
The legal chapter ends. What you do from here is up to you.
