2024 Real Estate Shake-Up: Lawsuits, MLS Overhauls, and the Future of Commissions

Drew Trombley

Oct 14, 2024 — 3 min read

Big things are happening in the world of residential real estate, and it's time to get up to speed. Whether you're an agent, a homeowner, or just someone who loves watching industry drama unfold, these changes are about to impact how homes are bought and sold in the U.S. Spoiler: lawsuits are flying, commissions are under fire, and the Department of Justice is all over the National Association of Realtors (NAR).

Let’s break it down simply—no fluff, just the need-to-know.

1. Major Lawsuits: The Real Estate World is Getting Sued Left and Right

Burnet-Sitzer Case: This is the big one. It’s all about the long-standing commission structure that forces sellers to pay both their agent and the buyer’s agent. The claim? This is inflating costs for sellers and making the whole process less competitive.
NAR and DOJ: The Department of Justice isn't letting the National Association of Realtors off the hook. The DOJ argues that NAR’s rules limit competition and prevent consumers from negotiating lower commissions. They had a settlement in 2020, but it blew up in 2021, and the fight is still going strong.
Zillow and Redfin in the Crosshairs: Zillow is dealing with heat from its now-closed Zillow Offers iBuyer program, while Redfin faces lawsuits for alleged discriminatory practices in its home-buying program.

2. MLS is Getting a Makeover

The way MLS (Multiple Listing Services) have operated for years is being challenged. For ages, sellers paid both the listing and buyer’s agent commissions. Lawsuits and government pressure are pushing for change.
NAR Policy Updates: Recent moves by NAR are tightening rules around “pocket listings” (private listings), and MLSs may soon no longer require sellers to pay buyer agent commissions at all. That’s a massive change.

3. DOJ’s Eyes Are Everywhere

The DOJ is cracking down on what they see as unfair practices in the real estate world. They’re pushing for more transparency in commission structures and fewer rules that keep agents stuck in outdated practices. It’s likely we’ll see more government action on this front in the coming months.

What’s Happened So Far?

The real estate industry’s long-standing commission structure is in trouble, with lawsuits challenging how agents get paid and who’s responsible for those fees. On August 17th, 2024 a big change went into place: Buyer Agents can no longer accept "commission" from sellers (along with a number of other changes!)
Zillow, Redfin, and others are under the microscope for their business practices, with lawsuits calling into question their approaches to home sales and buyer programs.
The DOJ is pushing for more transparency and freedom for consumers in the real estate market, going after NAR and major players for anti-competitive practices.

Bold Predictions for the Next 6 Months

Commissions Decoupled: Buyers will soon be paying their agents directly, not relying on sellers to cover it. This could lead to lower total costs for sellers and shake up how agents operate.
More Lawsuits, More Action: Expect more legal battles from both sides of the industry, as well as new government regulations to increase transparency and competition.
Tech Giants in Trouble: Companies like Zillow and Redfin will face even more lawsuits and scrutiny, and they might have to adjust how they do business—or risk being broken up.