BAM Key Details:

  • On Thursday evening, the Department of Justice (DOJ) filed a statement of interest regarding a proposed settlement for the Nosalek lawsuit.
  • The DOJ’s statement proposed a significant change in real estate transactions, suggesting that sellers should no longer pay commissions to buyer agents.
  • If adopted, this change could alter how real estate deals are structured and how agents are compensated.

Thursday evening, the Department of Justice (DOJ) filed a statement of interest about a proposed settlement for the Nosalek lawsuit, also known as the MLS PIN lawsuit.

This came weeks after the plaintiffs filed a motion to administratively stay the lawsuit. Judge Patti B. Saris granted the motion on Wednesday, which allowed the case to be reopened on Thursday. The DOJ had until the end of the day to file its statement of interest.

In its statement, the DOJ offered proposals to include in the settlement, including an injunction “that would prohibit sellers from making commission offers to buyer brokers at all,” as reported by Real Estate News.

DOJ Proposal Calls for an End of Sellers Paying Buyer Agent Commission

The DOJ has proposed a significant change in how real estate transactions work. It suggests that sellers should no longer pay commissions to buyer agents at all. This proposal aims to promote more competition “by empowering buyers to negotiate directly with their own brokers,” according to the statement. 

The filing goes on to read, “As long as sellers can make buyer-broker commission offers, they will continue to offer ‘customary’ commissions out of fear that buyer brokers will direct buyers away from listings with lower commissions. When sellers make such offers, buyer brokers need not compete on price to attract buyers. The settlement does not ameliorate these dynamics.”

If adopted, this would change how real estate deals are structured and how agents are paid.

Nosalek Lawsuit

Filed in 2020, the Nosalek lawsuit alleges that the MLS Property Information Network (MLS PIN), a broker-owned MLS, adopted a policy similar to that of the National Association of Realtors (NAR), requiring listing brokers to offer compensation to buyer agents before listing a property on the MLS. Other defendants include Anywhere, RE/MAX, Keller Williams and HomeServices of America.

Since the MLS PIN is broker-owned, NAR is not a defendant in this case. However, since follows rules similar to those laid out by NAR, it has implications for all MLSs.  Should the DOJ’s proposals be accepted in the settlement, it could impact the outcome of numerous commission lawsuits the industry is currently facing. 

Stay tuned for more updates.