Exciting news for homesellers and homebuyers! The National Association of Realtors (NAR) has settled a $1.8+ billion lawsuit on price fixing and collusion by agreeing to pay $418 million in damages. This settlement is a big deal for the homebuying and selling business. Traditionally, sellers paid both their broker and the buyer’s broker. However, with this agreement, sellers’ agents won’t have to offer commissions to buyers’ agents anymore. This change allows both sellers and buyers to negotiate lower commissions and reduces practices like "steering," where agents push clients towards pricier homes for bigger commissions.
The settlement is seen as a win for buyers and sellers in the real estate market. With expected decreases in real estate commissions, there should be improved price discovery and more transactions, benefiting consumers by saving or making them more money. The settlement is likely to lead to a significant drop in commission rates, possibly by 25% to 50%, changing the dynamics of real estate transactions.
Following the settlement, sellers are advised to negotiate for a maximum 1.5% commission to the listing agent, down from the previous 2.5% – 3%. Everything in real estate is negotiable, so it’s essential for sellers to be aware of their options. The settlement also impacts how buyers’ agents are compensated, with a shift towards fixed fees or reduced commission percentages determined by the market.
The settlement will likely lead to more transparency and changes in how real estate transactions are conducted. It’s important for both buyers and sellers to understand these shifts and be prepared to negotiate effectively in the evolving real estate landscape.
