The real estate commission lawsuit most people are asking about is the Sitzer/Burnett antitrust case in Missouri, where a jury returned a verdict of nearly $1.8 billion against the National Association of Realtors and major brokerages. NAR settled nationwide claims for $418 million and agreed to practice changes that took effect on August 17, 2024. The old system, where a home seller automatically paid the buyer’s agent through a commission offer posted on the MLS, is gone. Buyers now sign a written agreement spelling out what their agent earns before touring a single home.
What the Lawsuits Challenged
The claims were brought under Section 1 of the Sherman Antitrust Act, which prohibits agreements that unreasonably restrain trade.1Office of the Law Revision Counsel. 15 U.S. Code 1 – Trusts, Etc., in Restraint of Trade Illegal; Penalty The target was the industry’s Cooperative Compensation Rule. To list a property on the Multiple Listing Service, a seller had to agree up front to pay the buyer’s agent a specific commission.
Sellers argued this was price-fixing. Because buyer agents could see each listing’s offered commission before deciding what to show their clients, agents had an incentive to steer buyers toward higher-paying listings and away from sellers who offered less. Plaintiffs said that pressure kept commissions clustered around five to six percent of the sale price for decades, even as technology made parts of the transaction cheaper.
The Verdict and Settlements
On October 31, 2023, a Missouri jury deliberated less than three hours before finding that a conspiracy existed, that it inflated commissions, and that the defendants knowingly took part. Damages came in at nearly $1.8 billion, and federal antitrust law allowed that figure to be trebled to more than $5 billion.
The industry settled rather than face that exposure. Anywhere Real Estate paid $83.5 million and RE/MAX paid $55 million before the verdict. Keller Williams followed at $70 million.2Western District of Missouri | United States Courts. Burnett et al v. National Association of Realtors et al NAR agreed to pay $418 million over four years to resolve claims nationwide, and a federal judge granted final approval to the NAR and HomeServices settlements on November 27, 2024.3Residential Real Estate Broker Commissions Litigation. Home – National Association of Realtors
What Changed on August 17, 2024
The practice changes apply to every transaction involving an NAR-affiliated MLS.4National Association of REALTORS®. NAR Settlement FAQs Two shifts matter most.
No Commission Offers on the MLS
Listing agents can no longer include an offer of compensation to buyer brokers on the MLS. A listing that once advertised “2.5% to buyer’s agent” alongside the square footage can no longer do that. Sellers can still agree to help cover a buyer’s agent fee as part of purchase negotiations, but the offer no longer travels through the MLS to every agent on the platform.4National Association of REALTORS®. NAR Settlement FAQs
Written Buyer Agreements Before Touring
Buyers must now sign a written agreement with their agent before touring any home, including live virtual tours. Chatting with an agent at an open house or asking about services doesn’t trigger the rule. The moment you want an agent to show you a specific property, a contract must be in place.5National Association of REALTORS®. What the NAR Settlement Means for Home Buyers and Sellers
The agreement has to state exactly what the agent earns. It can be a flat dollar amount, a percentage, or an hourly rate, but it cannot be open-ended. “Whatever the seller offers” doesn’t qualify. The agreement must also tell you clearly that broker fees are fully negotiable and not set by law, and the agent cannot collect more from any source than what the agreement specifies.5National Association of REALTORS®. What the NAR Settlement Means for Home Buyers and Sellers Early Federal Reserve data suggests buyer-agent commissions have started to decline, though they remain at relatively high levels.6Board of Governors of the Federal Reserve System. Commissions and Omissions: Trends in Real Estate Broker Compensation
How Buyers Pay Their Agent Now
When the buyer is responsible for the agent’s fee, the question becomes where that money comes from at closing.
VA Loans
Through Circular 26-24-14, effective August 10, 2024, the VA authorized veterans to pay reasonable buyer-broker fees directly.7Veterans Benefits Administration. Circular 26-24-14 The fees cannot be rolled into the loan. Veterans pay them in cash at closing, and lenders will verify liquid assets to cover both the commission and other closing costs. If a seller agrees to pay the buyer’s agent, that amount is treated as a cost of the sale and does not count against the VA’s seller concession cap.
Conventional Loans
For conventional loans backed by Fannie Mae, seller concessions are capped by loan-to-value ratio. Buyers putting less than 10 percent down can receive up to 3 percent in concessions. Those putting 10 to 25 percent down can receive up to 6 percent. Buyers with more than 25 percent equity can receive up to 9 percent. Investment properties are capped at 2 percent.8Fannie Mae. Interested Party Contributions (IPCs) A seller-paid buyer-agent fee counts toward these limits, so buyers making small down payments have the least room to negotiate seller help.
Seller Claims and Payouts
The NAR settlement class generally covers sellers who listed a home on an NAR-affiliated MLS and paid a commission to a buyer’s broker. Eligible date ranges vary by brokerage and region. The claim filing deadline was May 9, 2025, and that deadline has passed.9Residential Real Estate Broker Commissions Litigation. Key Dates – National Association of Realtors The settlement site still references late claims, but there is no guarantee they will be accepted. Sellers who sold multiple homes during the eligible period needed a separate claim for each property.10Residential Real Estate Broker Commissions Litigation. Claim Form Landing
No money has gone out yet. Benefits cannot be paid until pending appeals are resolved, and there is no public timeline for that.3Residential Real Estate Broker Commissions Litigation. Home – National Association of Realtors When funds do flow, estimates of the per-person payout range from roughly $13 to $50 after attorneys’ fees and splits across millions of eligible sellers. The named plaintiffs are paid first, then the remainder is divided among everyone else who filed.
Buyer-Side Lawsuits Still Pending
Buyers have their own set of claims, arguing that inflated commissions were baked into higher home prices. The main case is Tuccori v. At World Properties, where NAR has agreed to a proposed $52.25 million settlement. If approved, the bulk of NAR’s payments wouldn’t begin until after June 2028. The settlement would release NAR members, state and local Realtor associations, affiliated MLSs, and qualifying brokerages from buyer-side liability.11National Association of REALTORS®. NAR Reaches $52.25M Settlement in Tuccori Homebuyer Class Action Lawsuit
A related case, Batton v. NAR, was stayed by an Illinois judge in April 2026 while the court considers whether Tuccori resolves the overlapping claims. If Tuccori is approved, it would likely extinguish Batton as well. Buyers who believe they were harmed should watch these cases, as a separate claims process may open if Tuccori gets court approval.
Are Settlement Payments Taxable
Yes. Under Internal Revenue Code Section 61, all income is taxable unless a specific provision exempts it. The exclusion in Section 104 applies only to damages for physical injuries or physical sickness.12Internal Revenue Service. Tax Implications of Settlements and Judgments An overpaid commission does not qualify.
The IRS looks at what the payment replaces. These settlements compensate sellers for economic losses from inflated commissions, which makes the payments ordinary income. If your total settlement payment is $600 or more, the administrator will issue a Form 1099-MISC. Most individual payouts are expected to fall below $600, so many claimants will not receive a 1099, but the income is technically reportable regardless of the amount.