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The National Association of Realtors has officially handed over nearly half of its monetary obligation under a settlement that aims to resolve antitrust claims brought by homesellers nationwide over the trade group’s commission rules.
Under the terms of the deal, NAR must pay $418 million, plus interest, by February 2028 into an escrow account for the settlement fund to benefit a class of millions of homesellers across the country. The 1.5-million member trade group paid $5 million into the account when the deal was first submitted for preliminary approval and an initial $197 million payment became due on Monday, Feb. 24, 90 days after the deal received final approval from a federal court in Missouri.
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NAR made that $197 million payment on Feb. 20, according to lead plaintiffs’ counsel Michael Ketchmark of Ketchmark & McCreight.
Michael Ketchmark
“As expected, NAR has made its first payment under the settlement agreement,” Ketchmark told Inman in a statement.
Asked where the payment was coming from and whether it was coming entirely from NAR’s reserves, an NAR spokesperson declined to comment except to say, “We are complying with the terms of the settlement.”
At least some of the settlement payout will come from NAR’s reserve funds, including operating reserves and those that were collected from members specifically for lobbying and to advertise the Realtor brand. At NAR’s annual conference, NAR NXT, in November, the NAR Executive Committee approved a motion that advocacy and consumer advertising campaign reserves “be used to fund NAR’s settlement obligations … and that the board designation for these funds be suspended for the duration of the settlement period.”
NAR declined to comment on how much of the payment was coming from each bucket of reserves, how much is currently in those reserve funds, and how it will impact NAR operations, advocacy and consumer ad campaign that these funds are being taken from their respective reserves.
In November, the Executive Committee also approved a recommendation from the Finance Committee “suspend[ing] the operating reserve minimum outlined in NAR’s Investment Policy for the duration of the settlement period.” That policy requires that an amount equal to 50 percent of NAR’s gross operating budget be maintained in operating reserves.
The committee said NAR needed the “flexibility” to drop below that minimum in order to meet its settlement obligations.
At the conference, the trade group’s treasurer, Greg Hrabcak, told NAR’s board of directors that budget cuts undertaken to comply with the settlement would have “minimal impact on our products, services and our advocacy support.”
“Nearly all areas of NAR contributed to the reductions, without any one area feeling a disproportionate impact,” he said.
“The 2025 budget proposal moves NAR forward down the path toward settlement fulfillment in a very disciplined and responsible fashion.”
NAR has also taken other steps lately that will trim its expenses, including pulling the plug on its annual tech conference and ceasing the print versions of its Realtor Magazine.
NAR’s next settlement payment, $72 million, is due Feb. 24, 2026. The settlement itself is currently being challenged in the Eighth Circuit Court of Appeals. None of the settlement funds will be disbursed to homesellers until all appeals have been exhausted and the deal becomes effective.
