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Entry 2303.1 - How a Federal Court, the US Dept. of Justice & NAR’s Clear Cooperation Policy...

Updated: Jul 25, 2023

How a Federal Court, the US Dept of Justice & NAR’s Clear Cooperation Policy affect Brokerage.

First, My Opinion: We are worth every penny we earn, so long as it is earned under the laws and rules of the state that governs us, and we are abiding by the REALTOR® Code-of-Ethics. Be proud of what you do as a REALTOR®. My grandfather said, “Being a REALTOR® is an honorable profession”, and I agree.

On Wednesday January 25, 2023 a Federal Judge granted NAR’s petition to end a US Dept of Justice inquiry into NAR’s Clear Cooperation Policy and participation rule. In short, the US DOJ must abide by the terms originally agreed in the 2020 settlement agreement. That settlement agreement emphasized and furthered NAR’s longstanding pro-consumer guidance.

Prior to January 25, 2023, NAR’s Clear Cooperation Policy had already adopted clarifications to its policy by providing increased transparency for consumers by enabling brokerages to make offers of compensation public on their websites. NAR’s policy changes strengthened transparency for consumers by providing guidance for local MLS broker marketplaces (local MLS’s). The following three changes to the policy are central to the original settlement agreement: 1) Disclosure of compensation offered to buyer agencies, 2) Listings are not to be excluded from search results based on the amount of compensation offered to buyer agencies, and 3) Buyer brokers do not represent their services as free.

In addition, NAR’s Code-of-Ethics Standard of Practice 12-1 was amended and became effective on January 1, 2022 stating: “REALTORS® must not represent that their brokerage services to a client or customer are free or available at no cost to their clients, unless the REALTOR® will receive no financial compensation from any source for those services.”

NAR’s General Counsel Katie Johnson stated, “This is a clear victory for NAR and is delighted the US DOJ is now bound to honor its agreement”. Johnson went on to say, “As part of our commitment to act in the best interest of home buyers and sellers across the country, NAR remains dedicated to advancing independent, local real estate marketplaces to provide for greater economic opportunities and equity for small businesses and consumers of all backgrounds and financial means”.

NAR is now in a much stronger position to continue to defend against class-action lawsuits challenging its MLS rules, and policies, including its US disclosure model of broker compensation.

The above does not constitute Legal Advice. Therefore, find a competent attorney for legal advice.


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