Real estate controversies and how they've impacted sales

NAR settlement, Compass moves and the impact on real estate

March 19, 2025 5:21 PM

A February survey of real estate brokers in the U.S. and Canada reported a decline in sentiment about the direction of the market.

The Real Brokerage's Transaction Growth Index, which measures year-over-year activity in home sales by those surveyed, fell to 49.1 from 51.3 in January; for the U.S. only, it settled at 49.4 for February, down from 50.2 one month prior.

When the metric is under 50, Real considers the housing market to be in a state of contraction.

"Higher inventory levels are giving buyers more options and greater negotiating power, but affordability still remains the biggest hurdle in today's market," said Tamir Poleg, chairman and CEO of Real in a press release.

"While our Transaction Growth Index softened slightly from last month, the overall market continues to show signs of stabilization."

The Agent Optimism Index, an opinion about how the market will perform in the next 12 months, was also lower. It fell to 70.4 from 74 in January.

Just under half of the respondents, 48%, were more positive about their local market than they were in January, with 22% significantly more optimistic. Only 9% were pessimistic, but 22% remained neutral.

The following is a roundup of some recent news that will likely impact real estate and mortgage professionals' opinions on the direction of the market in March.

Compass founder looks to take down CCR

The CEO of Compass, Robert Reffkin, has made no secret about his distaste for the National Association of Realtors' Clear Cooperation Policy and requirements to use its multiple listing service.

This policy calls for real estate brokers to submit a property listing to the MLS for cooperation with other participants within one business day of marketing it to the public.

Among his recent salvos against CCP, Reffkin invited agents to access the Compass Coming Soon product, listings that are only searchable on its website.

"NAR and local MLS mandates related to the Clear Cooperation Policy prevent Compass agents from sharing their private exclusives with non-Compass agents," Reffkin said in the press release. "At Compass we are advocating for homeowners to have control over how their listings are marketed."

About two weeks later, Reffkin sent emails to MLS providers suggesting changes to their CCP policies, according to published reports. This was confirmed to National Mortgage News by a Compass spokesperson.

Is Compass buying HomeServices?

Published and social media reports have indicated Compass is very close to inking a deal to acquire HomeServices of America, which is owned by Berkshire Hathaway.

However, HomeServices denied any deal is in the works, either with Compass or some other company.

"There is no pending or contemplated transaction or sale between HomeServices of America and Compass or any other party," Chris Kelly, executive vice president at HomeServices, said in a statement to National Mortgage News. "We are fully committed to our companies, agents, employees and mortgage, title and insurance professionals — helping to empower the incredible work they do for buyers, sellers and their communities."

Compass neither confirmed or denied the reports. "We don't comment on market rumors or speculation," the spokesperson said in a statement.

Rex still seeking satisfaction from the courts over Zillow

So far, REX-Real Estate Exchange has lost at every turn in its court battle against Zillow.

On March 3, a unanimous three-judge panel in the Ninth Circuit Court of Appeals upheld lower court rulings against the now-defunct company, even after the Biden Administration Justice Department argued that the case should be returned to the District Court for a new trial.

Now REX wants an en banc panel in the Ninth Circuit to rehear its appeal, in a motion filed on March 17.

At the District Court level, much of the original action (which included NAR) was dismissed and the two counts which did go to trial were found in favor of Zillow. In January 2024, the trial judge, Thomas Zilly, rejected REX's motion for a new trial.

Nosalek settlement still not right: Justice Department

The Department of Justice filed a supplemental statement of interest protesting the settlement in the real estate buyer broker action known as Nosalek.

"Plaintiffs have again failed to establish that the proposed settlement is 'fair, reasonable and adequate,'" the opening statement in the filing reads. This is because the current version would still only result in "cosmetic changes" to the rules regarding seller offers of compensation on MLS Property Information Network, the first named defendant in the action.

The filing was made on March 17. It claims the changes will not stop the steering by agents away from listings with lower commissions.

The monetary relief is also lacking, DOJ argued, declaring it "appears to be limited" as the class involves an unspecified number of land and mobile home sellers.

Commissions one year later

On March 15, 2024, NAR ended its appeals of the Sitzer/Burnett case (a similar proceeding to Nosalek) and agreed to a $418 million settlement, as well as changes to the compensation rules. The changes took effect in August, six months later.

"I noticed [in] the first month or so a significant amount of confusion, partial truths and unverified statements that created a small amount of chaos," said Phil Crescenzo Jr., vice president Southeast Division at Nations One Mortgage, in comment on the anniversary of the announcement. "I didn't see this negatively affect agents in negotiating offers or sellers' listings in transactions we were involved with."

But well-prepared real estate teams were ahead of the game in terms of communicating the changes to clients, with a "comprehensive but simple breakdown," Crescenzo said.

The power in negotiation deals and fees

When it comes to buyer and seller negotiations in real estate transactions, consumer power is affected by the "age-old supply and demand philosophy.

"While there has been some slight easing in sale price, there are still concessions offered to move these homes from what I've seen," Crescenzo continued. "This would lead me to believe it is still a strong sellers' market due to overall limited inventory in most areas."

But The Real Brokerage survey found 46% of the U.S. agents advising buyers to be more aggressive in negotiating price as inventory increases.

Just over a quarter of those in the U.S., 26%, recommended no significant change to the buyer's negotiating philosophy, while 13% encouraged them to make more contingencies in their offers and 11% suggested taking more time or looking at other options.

The state of the market right now

Approximately two-thirds of the respondents to The Real Brokerage survey said homes are taking slightly or significantly longer to sell than one year ago. Just 14% think the time frame is slightly or significantly shorter.

"Sellers who overprice their homes are seeing longer days on market, while those who price more competitively or enhance their listings with staging and cosmetic improvements are securing more offers and faster sales," said Sharran Srivatsaa, Real's president.

Observations about affordability are improving. While more than half of the agents in the survey, 53%, said the lack of affordability is the biggest hurdle for buyers, the share was down from 61% in January.

But the share who think economic uncertainty is holding the housing market back grew to 15% from 10% over the same time frame.