Judge Approves $418 Million Settlement That Will Change Real Estate Commissions

A settlement that will rewrite the way many real estate agents are paid in the United States has received preliminary approval from a federal judge.

On Tuesday morning, Judge Stephen R. Bough, a United States district judge, signed off on an agreement between the National Association of Realtors and home sellers who sued the real estate trade group over its longstanding rules on commissions to agents that they say forced them to pay excessive fees.

The agreement is still subject to a hearing for final court approval, which is expected to be held on Nov. 22. But that hearing is largely a formality, and Judge Bough’s action in U.S. District Court for the Western District of Missouri now paves the way for N.A.R. to begin implementing the sweeping rule changes required by the deal. The changes will likely go into full effect among brokerages across the country by Sept. 16.

N.A.R., in a statement from spokesman Mantill Williams, welcomed the settlement’s preliminary approval.

“It has always been N.A.R.’s goal to resolve this litigation in a way that preserves consumer choice and protects our members to the greatest extent possible,” he said in an email. “There are strong grounds for the court to approve this settlement because it is in the best interests of all parties and class members.”

N.A.R. reached the agreement in March to settle the lawsuit, and a series of similar claims, by making the changes and paying $418 million in damages. Months earlier, in October, a jury had reached a verdict that would have required the organization to pay at least $1.8 billion in damages, agreeing with homeowners who argued that N.A.R.’s rules on agent commissions forced them to pay excessive fees when they sold their property.

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