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As the National Association of Realtors and brokerage franchisor prepare to appeal a jury’s decision to award approximately $5 billion in damages to 500,000 Missouri sellers, NAR President Tracy Kasper posted a five-minute video on Wednesday explaining how Realtors should navigate choppy waters.
Tracy Kasper
“I know that there are questions about last week’s verdict, so I wanted to reach out directly,” she said in the video. “As a fellow Realtor, I get it. I’m a broker-owner. I list and sell properties just like you do every single day. I have employees and I’m getting those questions myself.”
“It is critical to maximize transparency with your clients about their choices and your terms,” she added. “Use your agreements with your buyers and your sellers to help them understand exactly what services and value you’re going to provide to them. Continue to express that commissions are negotiable and set between you, their broker and themselves. Explain clearly how you get paid and what you are charging.”
Kasper said NAR still believes in its cooperative compensation rule, which requires listing brokers to make an offer of compensation to buyer brokers in order to submit a listing to a Realtor-affiliated MLS. However, she said Realtors should be transparent with consumers about the negotiable nature of the rule, which allows listing brokers to continue to make an offer of compensation to buyer’s brokers or allows buyers to pay their broker directly.
“For buyers, this includes paying for your services directly, plus options to obtain some or all of that fee through other means, such as offers of compensation from a listing broker, all of which would be specified in your buyer representation agreement,” she explained. “For sellers, this includes options to allow offers of compensation to be made by their listing broker to a buyer’s broker, and if so, how much and under what terms, all of which, again, would be specified in your listing agreement.”
She added, “I also encourage everyone to express the incredible value that we as real estate agents who are Realtors bring as we guide our consumers through the financial, legal and community complexities of buying and selling a home.”
Kasper said the fight to keep the cooperative compensation rule is far from over, as NAR, HomeServices of America and Keller Williams prepare to appeal the Sitzer | Burnett ruling. Meanwhile, RE/MAX and Anywhere are still awaiting the court’s approval on their respective settlement terms for the Sitzer | Burnett, Moehrl and Nosalek suits.
“I was incredibly, incredibly disappointed by the verdict. The jury reached an outcome that was neither supported by the law nor the facts that were presented in this case,” she said. “The plaintiffs tried to portray this outcome as a win for consumers, but those of us in the industry know the opposite is true. This is one chapter in a very long legal process. We plan to appeal the verdict.”
Kasper said Realtors should be ready for “other legal developments” that could include a court order “that changes the rules about cooperative compensation.” The NAR president also alluded to Moerhl and a new lawsuit filed by Sitzer | Burnett plaintiffs’ counsel Michael Ketchmark last week known as “Gibson.” She did not, however, mention another new lawsuit filed Nov. 2 in a federal court in Illinois that Inman reported on after Kasper’s video.
The Gibson lawsuit was filed Oct. 31 in the U.S. District Court for the Western District of Missouri and lists Compass, eXp World Holdings, Redfin, Weichert Realtors, United Real Estate, Howard Hanna Real Estate, Douglas Elliman and the National Association of Realtors as defendants. Gibson seeks $200 billion in estimated damages for Missouri homesellers — an amount that would be trebled to $600 billion.
“There are other legal actions pending and we may see additional plaintiffs come forward to make similar allegations in new cases,” she added. “In short, we are in the midst of a very complex legal situation and we are working around the clock to evaluate the situation and get the very best advice about a path forward.”
Kasper also acknowledged NAR CEO Bob Goldberg’s decision to retire a year early and the appointment of former Chicago Sun-Times CEO Nykia Wright as interim CEO. Goldberg’s term officially ends on Nov. 20 and comes after months of fierce criticism regarding his handling of sexual harassment allegations and the Sitzer | Burnett and Moehrl antitrust lawsuits.
“We are so glad to welcome Nykia to NAR and to congratulate Bob Goldberg on his retirement,” she said. “I have heard from so many of you so many warm wishes for both of them and optimism for our future. Thank you for that outreach, and I just want you to know I share your optimism.”
“I’ve been reflecting on something that Nykia said when she joined us last week that really resonated with me. That is that we help families across America realize the American Dream every single day.” She added, “We know that and, of course, more broadly, we stand for and we advocate for property ownership and fair housing.”
“It can be so easy to forget all of that at a time like this, but I urge you to keep it front of mind just as I’m doing. We will continue to make a difference for our clients, for our families, and for our communities. As always, I will continue to communicate with you as clearly as I can when I have new information, and we will do our best to answer your questions along the way.”
