Not homesellers, not homebuyers, not the Department of Justice (DOJ), but real estate agents themselves are now suing the National Association of REALTORS® (NAR) for alleged conspiracy and antitrust behavior, focused on the requirement that agents join NAR and local REALTOR® associations to access the MLS.
Filed yesterday in federal court in Michigan by two brokers and one agent affiliated with Sotheby’s, the lawsuit is seeking to certify a class of brokers and agents, and claims that the NAR settlement specifically made REALTOR® membership and MLS access less valuable.
“(T)here is now no guarantee of broker commission associated with using the MLS. This truly eliminated the sole purpose of the NAR and (Michigan Association of REALTORS®) sponsored MLS systems by eliminating the guarantee of compensation between brokers,” the lawsuit said.
Beyond the settlement, though, the lawsuit goes to the larger issue that many regulators and real estate critics have hinted at, even as consumer-led class-actions and DOJ inquiries have seemingly homed in on specific MLS or NAR rules.
“The requirement of membership in the (named REALTOR®) organizations constitutes a conspiracy to monopolize the use of the MLS and creates barriers to the market for all REALTORS®, agents and brokers who seek to enter the market but who do not wish to belong to one of the (named REALTOR®) organizations,” the lawsuit claims.
Two brokers and three agents are named plaintiffs in the lawsuit—Douglas Hardy, Glenn Champion and Dylan Tent. All are affiliated with Signature Sotheby’s, which claims three offices and over 130 agents across Southeastern Michigan, according to its website. Hardy is the owner of Signature Sotheby’s, while Champion serves as president and managing broker.
Besides NAR and the Michigan Association of REALTORS®, the lawsuit names two local REALTOR® boards, with the plaintiffs claiming that they had to join all of these organizations in order to access the MLS. It also targets Realcomp II, the software company that “manages” and “regulates” the MLS.
While many of these accusations are not new, coming from brokers and agents today, they take on a very different tone—and maybe more importantly, reopen new legal challenges to the current structure of real estate.
The requirement that agents join a REALTOR® board in order to access the MLS has a long and tortured history of legal challenges going back to the 1970s. Currently, the legality of that stipulation depends on jurisdiction, with various federal courts having issued conflicting rulings over the last half-century, allowing some states to fully restrict access to the MLS, while others must allow non-NAR members to use those systems.
But with the DOJ’s unflagging push to further regulate real estate, and with seismic shifts caused by commission lawsuits, it seems possible that courts—and lawyers—will be willing to revisit the question.
In its investigation, which has mostly taken place behind closed doors, the DOJ has not specifically pushed for REALTOR® associations to divest MLSs. But antitrust lawyers at the department have made it clear they want brokers to stop sharing compensation, and pushed for rules that would go further than the NAR settlement to address this.
Two associations that own REcolorado, one of the largest MLSs in the country, cited the recent regulatory uncertainty in their decision to sell the MLSs to a private third-party.
NAR, in a blog post on its website addressing the issue, says that “limiting MLS access to REALTORS® is legitimate and lawful, and…litigation challenging the MLS membership access rule can be successfully defended.”
An NAR spokesperson told RISMedia via email that the organization “stands by the pro-competitive, pro-consumer local broker marketplaces, which local associations may choose to provide as a member benefit.”
“Furthermore, NAR stands by the practice changes required by the proposed settlement because they bring buyers and sellers greater transparency on compensation and protect consumer choice. NAR will defend against these baseless claims in court,” the spokesperson said.
The facts
According to the lawsuit, Hardy, Champion and Tent contacted NAR and the local REALTOR® boards “and requested that they be allowed to use the MLS system without being members.”
“Alternatively, Plaintiffs requested they be allowed to drop their membership in these organizations altogether. These requests were echoed and repeated in June and July of 2024,” the lawsuit claims.
Realcomp II “uniformly” denied these requests, the lawsuit says, “reiterating that membership…in these entities was mandatory without exception.”
The lawsuit notes that NAR does in fact allow MLS access to non-REALTORS® in some areas (again, based on previous legal challenges and rulings in certain jurisdictions).
Why file the lawsuit now, since most of these rules have been in place for years or decades? Again, according to the plaintiffs, the NAR settlement removed the major value proposition of the MLS—namely, that buyer agents would receive an offer of compensation.
“The decision, made largely without any input by the Defendants (sic) members, greatly diminished any value created by the compulsory membership requirements,” the lawsuit says. “Further, while NAR and MLS (sic) have argued that the removal of this information is for the benefit of the consumers, plaintiffs believe it is contrary thereto and invites side negotiations, disharmony among agents/brokers and confusion for the consuming public.”
The lawsuit mistakenly claims that NAR agreed to settle the Burnett lawsuit in November 2023.
Currently, the lawsuit is not seeking to certify a national class, instead limiting its scope to agents and brokers in Michigan. The lawsuit also notes that Realcomp II chose to implement that ban on offers of compensation on July 16, well ahead of the mandatory national deadline of August 17, claiming this caused further hardship for local real estate professionals.
A lawyer for the plaintiffs did not immediately respond to a request for comment. Hardy and Champion did not immediately respond to emailed requests for comment.
Editor’s note: this story was updated at 11:58 a.m. eastern time with comments from NAR.
Count me in!!!! Good luck agents!!!
I’m very curious as to how this will play out. I have often thought this was a monopoly of sorts, and I don’t see the value-add of NAR. It’s been a painful bill to pay at the beginning of each year, and while dues won’t go up in 2025, you can almost guarantee they will in 2026, or go bust. Just like buyer agents are now needing to articulate their value to their buyer clients, NAR needs to articulate value to us – their clients – so that we understand why we are paying these high dues and also offering us choices (as we have to offer choices now to buyers) about whether or not we want to opt in. Also, we need to look at the fact that NAR should “de-couple” from our ability to belong to our local MLS without the mandated NAR membership.
Jennifer Masucci – I totally agree! I’ve been saying this for years. I’ve had more emails from NAR in the past couple of months than I had for 23 years before – tells me something. We need to hold their feet to the fire!
I completely agree. I have been saying this for awhile – MLS is now obsolete. Why do we need this when anyone can go on the internet and see listings. The main reason it existed was to share compensation, and now that that’s gone, I object to paying hundreds in membership fees for MLS. I hope more brokers and agents join this suit.
How do you think the listings get to the sites on the internet? Yep, the MLS.
Like that’s the reason we need MLS?! Advertising listings on the internet is the least of our concerns, there are plenty of options for that if MLS did not exist. Plenty of companies would line up for this. We don’t need MLS to advertise listings.
Property info online comes directly from the MLS. Primary benefit isn’t disclosing co-op, it’s marketing my sellers’ properties to other agents and consumers across the world via IDX interface. No MLS means we go back to books at each firm. No thanks!
I was just looking at MYMLS, which is not affiliated with NAR. It does the same thing with respect to IDX and allows offers of cooperative compensation.
My frustration with how NAR has handled this and how it is being “spun” is that the seller is paying the buyer agent commission. In fact, the negotiated commission is paid to the listing brokerage, who in turn is SHARING that commission with a cooperating broker (if they choose to). The seller isn’t paying that, they are paying the listing broker the amount they agreed upon who in turn is paying the buyer broker. In PA this has been disclosed on the listing contract since the advent of buyer agency. We do this because we understand the value of exposing a property to ALL buyers in the market, not just a select few. The more buyers, likely equals more money. The total commission likely isn’t going down (unless negotiated), it just has the potential to go entirely to the listing agent while the buyer is now required to not only enter into a contract JUST to see a property, but to potentially pay additional costs to have representation.
If I agree to reduce my commission at closing to offset seller expenses associated with the transaction, sellers have no problem with that. Sharing that listing commission with a buyer agent IS a benefit to the seller, no different than my covering other seller costs. I have yet to see how this is in any way a positive thing for any consumer or agent. But it sure did line the pockets of the class action attorneys, while the claimants will get next to nothing.
We belong to an organization that dictates local policy, settled a lawsuit that will only serve to hurt consumers, but yet spends 10s of thousands of dollars per year on lavish meetings, events and parties for the directors and line officers. How is this expense justified? I used to attend these meetings and always thought to myself, how is this helping the majority of the membership when only a very small percentage actually attends? Most agents join simply because the local rules require all agents be members in order to have access to the MLS. I’m interested to see how this plays out.
Agree 100%
Count me in!!!
The reason they can go online to the internet and see your listings is because you are paying for it in your MLS fees, otherwise there would be no internet listings as Zillow and everyone else gets them from the MLS, which is why it is frustrating that Zillow then in turn wants you to pay them a fee to send you referrals when you are basically paying for them to show the listings on the internet in the first place!
MLS’s aren’t the only means of getting information to the internet.
I want to know
Why a sole proprietor realtor in good standing must be affiliated with a BIC Before being allowed MLS ACCESS
WHY are sole proprietor realtors not BIC qualified or affiliated with a BIC being discriminated against and not allowed access to MLS,
This lawsuit has brought to light a lot of things that our MLS has been hiding for years. 1. Forcing Paragon on us even though we didn’t want it. Now we find out years later that Paragon is owned by NAR. 2. Also, the lock boxes we are forced to buy, and use is owned by NAR. 3. Our board has passed amendments to our bylaws that is never voted on by anyone but the board itself. 4. They no longer publish the minutes of their meetings and the only way we can see them, or our bylaws is physically go to the board office and read them there. That is just the tip of the iceberg. MLS needs to go and so does the NAR.
I agree, accept MLS don’t need to go it needs to be local.
If I am not mistaken and I could be – I was told NAR sold the mls feeds to Zillow, then Zillow charges the agents for the leads Does anyone know?
If true, how much did NAR receive?
If this is true this is detrimental to the Realtors.
No … NAR Sold our Realtor.com by allowing it to become a Publicly Traded Company. Then Homes.com bought them out and – wham~!
Jennifer Masucci – I totally agree! I’ve been saying this for years. I’ve had more emails from NAR in the past couple of months than I had for 23 years before – tells me something. We need to hold their feet to the fire!
Anyone want to file a suite in Missouri? I’m in!!!
Awesome
I completely agree. There was no input from the agents.
How do I join in this suit??????
I totally agree. This should be a class action suit not just for these locations. How do we get this going?
NAR is antiquated and irrelevant at best, a flimsy middle man money taker at worst. Obviously we can get listings in the internet and companies would pop up to help and be , you know. Free market! competitive. NAR has worked for their own gain, has had mis management suits, makes no realtor I know happy in any way, and they absolutely sucked at explaining our value in court. Which, was a suit that would not have ever happened if they’d properly vetted each state’s contracts. Why a national board if every local and state board acts independently? Don’t need ‘em, let’s overthrow them!
Agreed!! In addition to all their other shenanigans they sell our personal information to vendors. Personally, I am overwhelmed with spam calls from people who are reaching out to realtors to sell us something – where did they get the list – NAR! We are the product!! We are the producers!! Tired of everyone sucking us dry. NAR should have done a better job.
Vendors pay a small portion of what we pay for our local BoR dues. This gives them access to the mailing list for that entire network. For about a a fifth of what we pay in NAR and BoR dues every year, vendors can access the entire info list for every member of that BoR and they don’t have to become an NAR member to get it. I’m tired of it as well. I need to know what value the NAR actually provides.
I’ve been a member for 34 years and it seems over the years either NAR or local MLS has sold us out over the years. This goes back to the beginning of the internet and how IDX came about which took away a lot of control. Once that control was unleashed to all of the VOWs it opened the door for our positions to be considered less needed. We had proprietary access to the listings and gave it away. Now we are dealing with the ongoing fallout from losing that control. I’ve tried to see the value over the years being a member of NAR but have only been convinced it was necessary to gain access to the MLS. NAR did not utilize my 34 years of dues on hiring quality lawyers to fight this ridiculous lawsuit and for that I am done with them. I back these Broker/Agents and hope it goes Class Action and I will be advocating my local MLS to break away from NAR. The only good thing I can see is that I am on the “Back Nine” of my career in this business.
I was not a member of NAR since 2010 and have no problem selling properties. I’ve been in business since 2000 and I reject the principals of the “Realtors” organization. I have known HUNDREDS of unscrupulous agents who were members and claimed to have “ethics” and they got away with extremely unethical practices. But I digress. My local MLS here in NY did not require Realtor membership. Months ago, they sold out to a Realtor owned MLS. There is no other MLS in our county so all of our listings funneled over to the Realtor owned MLS, which had a price of DOUBLE the cost for membership for brokers. We had no choice but to pay to join NAR. Now I must pay membership fees to an organization I’ve not liked since 14 years ago, my costs doubled, the MLS is far lower quality than my old MLS, and I have no other option but to join a very small MLS that has a fraction of the listings on it, which has extremely limited membership. I have a right to have access to the same thing my colleagues have access to, which is to have a platform to sell my client’s properties. And if I don’t pay NAR, agents will not be able to find my properties in searches. Only buyers will find them on Zillow. And that defeats the purpose of a “co-broke.”
The very fact that there are so few agents and brokers afraid to stand against this, for fear of being kicked out of the organization, is akin to a cult. Read that again.
I’d also point out, as have my Realtor colleagues above, that the constant spam in my inbox is ludicrous. During the 14 years I chose not to be a member of this organization, I rarely, if ever, got spam. Now, it is NAR & NYSAR blowing up my inbox sometimes with multiple emails daily. Also, I’m now getting spam calls from “Realtors insurance” companies and other real estate related spam calls. And the Realtor MLS I was forced to join is charging double what my last MLS charged, and has ADS on top. Why am I logging into MLS and seeing this nonsense? It’s a cash cow. I’m also getting spam emails from companies trying to sell me services. I do not want this. Before being stuck with this, my email was clean and whenever an email came in, I knew it was important and related to a property. It’s now a free for all. I will be speaking to colleagues as time permits, to see if others are interested in following suit to see if there are any avenues that may be pursued to offer us more options without strong-arming us into membership. Also unfortunately is appraisers who are forced to be members as well. There should be one state run MLS, NON-AFFILIATED, and then if people choose to pay extra money to pay the organization, that’s their choice.
Lastly, something needs to be done about being required to pay an “out of area” MLS in order to get credit for a sale. I just closed a deal in the county next to me, which has a smaller MLS than I belong to. The sale shows nowhere, because I was not a member of that Realtor MLS. That is to say that if I sell 20 houses in a year that are 30 minutes from me, you will think I sold nothing because the public stats hides my name on the sales. I’ve never liked doing this to my colleagues from out of area, knowing they will not get credit as they’re not members of my MLS, and I’m not going to join their MLS, enter the listing and close it out with their ID # just so they get credit. What they’re doing should be illegal. If we sell a house anywhere in the state, we should get credit without having to pay yet another NAR OWNED MLS.
I’m in, I’ve never wanted to a part of NAR, i have always thought it is a monopoly when your forced to join to be member of MLS , also when i first got in the business i could list my properties directly on Zillow, and wasn’t a member of any MLS then zillow sold us out, We don’t need NAR period
In some states including mine (Florida) you can join a Tompson broker and access the MLS without NAR , state and local board memeberships
It’s about time!!!
I’m in! We don’t need the NAR, they threw us under the bus, they do absolutely nothing for us, other than ask for RPAC money, where did that get us? Now they want to tell us how to vote.
I’d gladly participate in a class action suit by REALTORS against NAR and the local MLSs. NAR amounts to an involuntary union that gets to negotiate our livelihoods and we have NO representation. They’ve done little to help the industry and a TON to damage the industry. The Code of Ethics is a joke…so many times I’ve looked up the various clauses to try to hold an unethical agent’s feet to the fire only to learn that the Code of Ethics really ONLY protects commissions and really does little to protect the consumer nor the way we are perceived by the public. As a retired military member I find it abominable that NAR is allowed to do what it does…seems like there is NO democracy, NO voice, NO voting! This lawsuit should never have happened and is a result of NAR putting their heads in the sand for years as they’ve encouraged collusion as I felt it personally when building my value proposition for fellow Veterans starting 10 years ago. The environment has changed in those 10 years ago but it’s a shame that back in 2014 I had to quote the anti-trust laws to fellow agents.
I’m in okla and would gladly join a class action suit