A Massachusetts court approved a preliminary settlement of a lawsuit that challenged the practice of home sellers offering to pay a commission to real estate agents who represent buyers.
The group of sellers who had sued MLS Property Information Network said the two parties agreed to prohibit posting those commissions with real estate listings on the network’s website. Federal District Court Judge Patti Saris gave initial approval to the deal Tuesday, a few days after the U.S. Department of Justice gave its blessing. The government had objected to an earlier proposed settlement in the case, because it would have allowed sellers to continue offering online to pay agent fees.
The settlement is similar to one reached by the National Association of Realtors last year with another group of sellers in a Missouri court. MLS was one of a number of multiple listing services, online platforms that compile home listings, around the United States that did not accept the 2024 deal, in part because of a provision that barred offering seller commissions on these websites.
The Department of Justice, MLS and an attorney for the sellers in the case could not be immediately reached for comment by email or phone.
The 2024 settlement is supposed to give sellers more negotiating power. They have always had the ability to negotiate, but until last year, sellers’ agents were allowed to use the online platforms to state that sellers were willing to pay buyers’ agent fees. Now such offers have to be communicated elsewhere, according to the NAR, through marketing tools such as “brokerage websites, social media posts, or simply through a phone call or email.”
MLS changed its policy in June 2024 to make it clear that sellers had the option of listing property on the website without offering compensation. Sellers could now offer a zero-cent commission, the company said. But that didn’t satisfy the Department of Justice, which said most sellers would continue to feel pressure to pay buyers’ commissions.
“It is likely that very few will do so out of fear that buyer brokers will steer their clients elsewhere,” the department said in a March court filing.
The sellers in the lawsuit told the court in March that since the policy change went into effect, 75% of sellers had opted not to offer compensation to buyers’ agents.
Although it dropped its objection to the settlement, the government told the court last week that doesn’t necessarily mean it thinks the deal goes far enough to protect sellers from pressure to compensate buyers’ agents.
“The United States maintains that blanket, upfront offers of buyer broker compensation by sellers or their listing agents constitute an anticompetitive practice that inflates costs for home buyers and sellers,” according to the court filing.