The Sitzer-Burnette lawsuit rocked the real estate industry nationwide, but what really changed? In Pennsylvania, the impact has been subtle, leaving many wondering what this settlement means for them. If you’re confused, you’re not alone.
Welcome to the last article in my series about the Sitzer-Burnette lawsuit and settlement of 2024. So far, we’ve cut through the confusion of click-bait headlines, dug into the impact for buyers, and looked at the changes for sellers. Thanks to your trust and referrals, I’ve been able to help our community understand these changes and navigate our real estate market confidently. In this article, we’ll be wrapping things up and looking at the entire picture.
As we’ve seen so far, the lawsuit alleged that the National Association of Realtors® (NAR) and some Multiple Listing Services (MLSs) had anticompetitive regulations that required sellers to pay buyers’ agents commissions. This claim was never proven or disproven, as NAR and association-owned MLSs settled the lawsuit. Though regulations were enacted addressing commissions, Pennsylvania's standards already covered most of the new expectations. The settlement led to a decoupling of buyer and seller agent commissions – but that’s always been the case for us. Practically, this means agents need to get more paperwork signed before they can help you buy or sell a home.
Headline Claims
When this was the center of media attention, all sorts of claims were flying around. Even reputable news sources fell victim to the misinformation, leading to article corrections and even an official notice from NAR concerning misleading media coverage. Articles speculated about NAR price-fixing, foretold the end of 6% commissions, and continuously talked about “the MLS” as if there is a single national entity.
As we’ve seen already in this article series, the above claims (and more) generated clicks and conversations but did more to add confusion than to educate consumers. The media frenzy around this lawsuit and settlement highlights the importance of working with a well-informed real estate agent you trust.
Read the rest of the story in my earlier article, here.
Changes for Sellers
For sellers, the big difference is in perspective. Where sellers once may have considered “the commission” as a single part of their accounting, now agents and their sellers need to discuss how much of that goes to the sellers’ agent and how much goes as cooperating compensation. While it had already been the case here in Pennsylvania for years, the idea that buyers’ agent and sellers’ agent commissions should be negotiated separately is a new idea in other parts of the county.
Notably for us in Pennsylvania, how information about cooperating compensation is shared with the market has changed. This means having a conversation with your agent about how offering cooperating compensation impacts their marketing and sales strategy. MLSs can no longer share any cooperating compensation information, though 3rd party sites (like compass.com) can. While offering cooperating compensation has been and remains a component of the strategy around selling your home, this settlement has added layers of nuance.
Head to my article to learn more about how these changes could impact selling your home.
Changes for Buyers
That shift in marketing strategy impacts the way buyers search for and find the next home of their dreams. Just as sellers and their agents have more to consider while planning their marketing strategy, buyers and their agents have more to consider while searching. Notably, anyone relying on their local MLS to hunt for a home should have their agent contact the seller’s agent to learn about any offered cooperating compensation – before even seeing the home. Otherwise, what becomes the top dream home could be out of reach financially.
More impactfully, buyers now need to sign a contract with their agent before the home hunting process begins. What was the expectation here in Pennsylvania is now standard operating procedure around the nation. Small as this change seems, it has a huge impact on showings. Even unrepresented buyers need to sign off acknowledging their professional relationship regarding real estate agents.
Do you or someone you know have more questions about how buyers are impacted by this settlement? Check out my article about the changes buyers face with the new regulations.
6 Months Later
We’ve been under the effects of the settlement for 6 months as of last week, and… not much has changed here in Pennsylvania. Real estate agents that are members of NAR had to go to some training on the updated paperwork, there are more disclosures and forms, conversations about compensation happen earlier and more often, and more complexity has been added to marketing. That’s really not much of a change, at all.
Thank you for joining me on this 4-part exploration of the Sitzer-Burnette Lawsuit Settlement of 2024! We started by dispelling myths, then dove into the changes for sellers and buyers, and finally wrapped it all up here. I hope this series has been not only educational but also reassuring – the sky hasn’t fallen, and the world of real estate hasn’t been unrecognizably changed.
If you’ve found this series helpful, don’t keep me a secret! Your referrals are the greatest compliment I can receive, and I’d love to help your friends and family find their place in the world. Send them my way today!
