FAQs

Is there anything REALTORS®, brokers, local associations, or MLSs need to do differently because of the Burnett verdict or these lawsuits?
These suits don’t change how you do business. The bottom line is that compensation will continue to be negotiable and set between brokers and their respective clients, as it always has been. REALTORS® will always be there to guide clients through the financial, legal, and other complexities of buying and selling a home.

Brokers should continue to use written listing and buyer agreements, whether from Texas REALTORS® or their own, to help clients understand exactly what services and value they are providing and how much they charge.

What can REALTORS® tell clients about these suits?
As a REALTOR®, you can continue expressing to clients, friends, and family that compensation arrangements (including commissions) are, and have always been, negotiable and set between brokers and their respective clients. Explain to clients the value you bring to the transaction and why you charge the fees that you do.

Can listing brokers still offer cooperating compensation?
Yes. No court ruling or NAR policy change prohibits listing brokers from offering compensation to cooperating brokers. Listing brokers in consultation with their clients decide if compensation will be offered to serve the seller’s best interest.

What should listing brokers discuss with sellers about cooperating compensation?
Sellers need to understand that offering cooperative compensation is not required. But listing brokers should also discuss the benefits of cooperative compensation. Many buyers don’t have the ability to pay their broker out-of-pocket on top of the down payment and other closing costs. By offering cooperative compensation, sellers expand the pool of potential buyers interested in their property, which can often lead to more offers with terms favorable to the sellers.

Can sellers and listing brokers refuse to offer cooperating compensation?
Yes. There is no association or MLS policy that requires any set amount of compensation in order to put a listing in the MLS. The MLS policy requires the listing broker to specify the amount of compensation being offered. If the seller and listing broker decide that no compensation will be offered, that’s what should be specified in the MLS. Some MLSs allow you to enter $0. Other MLSs require a nominal, positive amount to be entered of at least one dollar or one cent, which is effectively $0. Check with your local MLS about which option it has adopted.

How can I ensure I am fairly compensated as a buyer’s broker?
You can use a written buyer representation agreement. The Residential Buyer/Tenant Representation Agreement (TXR 1501) spells out to your buyer how much you will be compensated. That compensation may come from the seller, listing broker, or your buyer client. And remember, buyer’s agents can contact the listing broker to negotiate cooperative compensation listed in an MLS. Whatever the results of the negotiation, whether there is a change in compensation or not, the buyer’s agent must discuss the situation with the buyers and let the buyers decide what they want to do.

Will Texas REALTORS® create new forms or revise existing forms to address these issues?
Association legal staff is reviewing existing forms to determine the potential need for new or revised forms.

Texas REALTORS® has been named in two lawsuits, QJ Team et al v Texas Association of Realtors et al and Martin et al v Texas Association of Realtors et al. Several local associations of REALTORS® and real estate brokerages in Texas have been named as co-defendants. These lawsuits are two of several copycat lawsuits across the country that have been filed in the wake of a verdict against NAR and other corporate defendants in the case of Burnett v. NAR et al. Texas REALTORS® expected claims like this to be filed after the verdict was returned in Burnett. NAR has taken steps to overturn the decision in the Burnett lawsuit.

Texas REALTORS® stands by the value of the professional expertise that you provide to your clients.

The association has hired the law firm of Husch Blackwell to bring legal expertise to these matters. Husch Blackwell is a national law firm with extensive experience in antitrust litigation. Texas REALTORS® management, legal staff, and elected leadership are working with Husch Blackwell to review the filings and mount effective responses.

Though there are aspects of this litigation that Texas REALTORS® is unable to discuss, the association will provide information and updates to members as soon as possible. Here are details of the lawsuits as of press time, as well as answers to questions you may have. For the latest information, visit texasrealestate.com/lawsuit.

Texas REALTORS® maintains that the practice of cooperative compensation makes efficient, transparent, and accessible marketplaces possible. Sellers can sell their home for more and have their home seen by more buyers, while buyers have more choice of homes and can afford representation.

Texas REALTORS® disagrees with the assertions made in these lawsuits.

The lawsuits allege an antitrust conspiracy that suppresses competition and inflates fees paid by real estate consumers. Texas REALTORS® fundamentally disagrees with those assertions.

Texans have numerous choices when it comes to how they choose to buy and sell properties:

  • Buyers and sellers can choose to buy or sell homes without any assistance from a licensed broker.
  • They can hire licensed brokers who are not members of Texas REALTORS®.
  • They can hire licensed brokers who are members of Texas REALTORS®.

Broker compensation is negotiable.

There is no association rule or policy that sets compensation amounts or requires brokers to use any specific compensation structure. Brokers may negotiate with clients on their specific fees and services. There are many different compensation models that brokers may utilize, including commission, flat fee, hourly fee, and fees for specific tasks, which give consumers many choices of brokerage models, fees, and services.

Texas REALTORS® forms and agreements between brokers and clients clearly and effectively outline compensation.

These forms create more transparency so that all parties know who is being compensated, how they are being compensated, and how the compensation is determined.

What Brokerages Must Know

The following requirements are not new requirements based on the lawsuits but are important reminders of how brokerages must operate.

Firms must set their fees independently.

While some competing firms might charge the same amounts, they must independently arrive at their fees. Firms should never discuss setting fees with competitors; it is a violation of antitrust laws.

Be completely transparent about fees with clients.

Discuss fees with clients up front and get compensation details in writing. If you are representing sellers, you can use Residential Real Estate Listing Agreement, Exclusive Right to Sell (TXR 1101). When representing a landlord, you can use Residential Real Estate Listing Agreement, Exclusive Right to Lease (TXR 1102). Members representing buyers or tenants can use Residential Buyer/Tenant Representation Agreement (TXR 1501).

Demonstrate your value.

Prospects and clients won’t know the extent of the work you do on their behalf unless you tell them. Create lists, marketing materials, and presentations that detail all the services and benefits you provide. Scan this QR code for NAR’s list of nearly 300 ways REALTORS® bring value to clients.

What Should Local Associations Do?

Local associations must continue to comply with antitrust rules through their policies and during meetings and gatherings. NAR provides the following guidance:

  • Provide annual training to staff and volunteer leaders on how to spot and respond to potential issues.
  • Create clear policies that prohibit antitrust violations.
  • Empower staff and leaders to stop potential antitrust discussions in person and on social media.
  • Maintain clear and accurate records.
  • Seek legal counsel for advice on any association activities that may impact competition.
  • Encourage members to report antitrust violations or concerns to association leadership or legal counsel.

For more information relating to local associations and antitrust, visit nar.realtor/ae/aexperience/antitrust-for-associations.

What Happens Next?

Class-action lawsuits often take several years before going to a courtroom—if they get to a courtroom. During this time, the parties and their attorneys file various motions and conduct the discovery process to collect information and evidence.

At the end of last year, plaintiffs’ attorneys filed a brief requesting that nine of the copycat compensations lawsuits—including the two filed in Texas—be consolidated into one case. Even if that request or other similar consolidation or venue-change requests are successful, the basic information and guidance in this article remains sound. Texas REALTORS® will continue to update members on the progress of the case and important information members need to know. You can find the latest information at texasrealestate.com/lawsuit.