Major Real Estate Industry Changes: How the Sitzer/Burnett Lawsuit is Reshaping Buyer and Seller Representation in Tucson

The real estate landscape is changing nationwide, and Tucson is no exception. If you're planning to buy or sell a home, you need to know how the recent Sitzer/Burnett lawsuit settlement is reshaping how real estate agents work. Whether you're a first-time homebuyer, a seller looking for top dollar, or an agent adapting to new regulations, these changes will impact the way transactions happen.

So, what does this mean for Tucson’s real estate market? Let’s break it down.

What Was the Sitzer/Burnett Lawsuit?

This class-action lawsuit, recently settled for $1.8 billion, accused major real estate brokerages and the National Association of Realtors (NAR) of engaging in "price-fixing" by requiring cooperative compensation—where sellers paid part of the buyer's agent’s commission.

The result? New rules that increase transparency in agent commissions and require more upfront agreements between buyers and agents.

These changes officially went into effect on August 17, 2024, and they directly impact how homes are bought and sold in Tucson.

Key Changes Buyers & Sellers Need to Know

1. Buyer Agents No Longer Automatically Get Paid by the Seller

Before, listing agents set a co-op commission, which covered the buyer’s agent’s fee. Now, that’s gone. Buyers must negotiate their agent’s commission separately, meaning:

Buyers might need to pay their agent directly if the seller doesn’t offer compensation.

Seller-paid commissions must be explicitly agreed upon, making commission structures more transparent.

Tucson Tip: Some sellers may still offer compensation, but buyers should be prepared to negotiate agent fees upfront.

2. Buyer Broker Agreements Are Now Required

Gone are the days of informal handshake deals. Before an agent can show you homes, you must sign a Buyer Broker Agreement.

This contract outlines:

• How much your agent will be paid

• Who will be responsible for payment (you or the seller)?

• What services your agent provides

Tucson Tip: This agreement protects buyers by clearly defining agent duties. Before signing, ask your agent to explain compensation and what’s included in their service.

3. Unrepresented Buyers Need to Be Cautious at Open Houses

Walking into an open house without an agent? Be careful. The listing agent represents the seller, not you. Anything you say (like how much you love the home or your budget) can be used against you in negotiations.

Tucson Tip: If you’re serious about buying, have an agent before attending open houses to avoid revealing information that could weaken your negotiation power.

For Sellers: How This Affects You

1. You Decide Whether to Pay the Buyer’s Agent

Sellers are no longer required to offer commission to the buyer’s agent. However, offering a competitive commission could increase buyer interest in your property.

Tucson Tip: Work with your listing agent to understand the pros and cons of offering buyer agent compensation. In a highly competitive market like Tucson, it could give your listing an edge.

2. Clearer Paperwork & More Transparency

Listing agreements now explicitly state whether or not you’re offering buyer agent compensation.

Tucson Tip: If you’re unsure how these changes impact your sale, sit down with a trusted Tucson real estate agent to go over the listing agreement in detail.

For Agents: How to Succeed in the New Market

Real estate professionals in Tucson must adjust quickly to this new model by:

• Clearly explaining Buyer Broker Agreements

• Demonstrating their value to clients

• Becoming stronger negotiators

• Staying educated on legal compliance

Agents who communicate transparently and show their worth will stand out in this new real estate world.

What This Means for Tucson Homebuyers & Sellers

While these changes may seem overwhelming, they’re designed to create a fairer, more transparent real estate process.

- For buyers: You’ll have more clarity on agent fees but may need to pay for representation directly.

- For sellers: You now have flexibility in offering buyer agent compensation, but strategic choices can help attract more buyers.

- For agents: Your ability to educate, negotiate, and communicate effectively will determine your success.

Final Thoughts: Get Expert Guidance

Navigating Tucson’s real estate market is changing fast, but you don’t have to do it alone. Whether you’re buying, selling, or just trying to understand what’s next, working with a knowledgeable real estate professional will ensure you make informed decisions.

Have questions about how these changes affect you? Reach out to us today and let’s chat about your goals!