2024 NAR President Kevin Sears. Photo courtesy of the National Association of Realtors / Screenshot

Speaking at a Lamacchia Realty conference in Boston Feb. 1, the new president of the National Association of Realtors declared that the traditional rules of agent commissions are “going to change” in the wake of a $1.78 billion verdict against NAR and several prominent brokerages.

In remarks to the Crush It in Real Estate Conference captured on a cell phone video and posted in part by local YouTube real estate personality and trainer Jack Gately, 2024 NAR President Kevin Sears declared that “we lost” the high-profile Sitzer/Burnett anti-trust lawsuit in Missouri.

The verdict saddles NAR with damages payments that could bankrupt it, observers have said, and could lead to orders from federal Judge Stephen Bough to completely abandon the current structure of agent commissions in most parts of the country, where NAR rules dictate that member agents’ seller clients must pay the buyer’s agent’s commission. In addition to the Sitzer/Burnett lawsuit, numerous other cases have been filed that claim this commission structure is illegal under federal antitrust laws.

“Even at the end of the day our policy, what we do, is right, but being a sports guy all you have to do is look at the scoreboard. We lost,” he said in the video excerpts posted by Gately.

Inman first reported Sears’ remarks.

His admission is a striking change in tone for the association. Since the verdict in the Missouri case last fall, NAR officials have regularly declared their confidence in their ability to win an appeal of the judge’s decision despite separate multi-million-dollar settlements negotiated by fellow plaintiffs Anywhere Real Estate, RE/MAX and Keller Williams.

Sears told conference host Lamacchia Realty broker/owner Anthony Lamacchia on-stage that the association is continuing to pursue its appeals and other legal avenues but, “the bigger problem, Anthony, is that the [federal] Department of Justice. We’ve been in their crosshairs as long as I’ve been involved in the National Association of Realtors.”

Federal prosecutors have stated their interest in the outcome of the Sitzer/Burnett case and many other similar commission lawsuits, and have intervened in a similar lawsuit against MLS PIN, Massachusetts’ primary multiple listings service, to block an initial settlement that, they told the judge in the case, didn’t go far enough to change commission rules. Experts say they could do the same in the Sitzer/Burnett case or other commission lawsuits around the country.

Given this, Sears told the crowd at the Hynes Convention Center in Boston’s Back Bay, change is coming.

“The way that we operate our business is going to change. It is going to change, whether we embrace it and adapt or it’s going to be forced down our throats,” he said, adding that for the first time, he himself used a buyer representation agreement with a recent client.

While there is no consensus yet on how agents should adapt their practices to the outcome of these commission lawsuits, many experts are urging agents to use buyer-representation agreements as a first step, which ensure that they will get paid regardless of how negotiations with a home seller turn out.