A recent lawsuit settlement is expected to bring major changes to the residential real estate market, a development some are calling historic.
Fox 9 reported Friday that the National Association of Realtors (NAR) said the organization will pay $418 million in damages while also eliminating rules on commissions in order to settle the antitrust class action lawsuits, a move that still needs a judge’s approval.
Attorney Marisa Katz told the outlet it was an exciting development that will produce big changes in the way real estate brokers are compensated.
Right now, sellers pay realtors five to six percent commission and the agent shares that with the buyer’s agent.
But, the report continued, “Critics have said that the policy kept commissions artificially high.” Katz explained that buyers will now pay their agents while both buyers and sellers will be able to determine a commission amount with their agents, possible negotiating a better deal.
Realty company Home Avenue’s owner Greg Lawrence is all for the idea.
“I think it’s a historic moment for the industry. I think this is a big win for consumers, and I’m 100% in favor of it,” he commented, noting that he thinks such changes would lower housing costs and help people save money.
Meanwhile, Fox 11 offered a theoretical simplification of the issue.
The outlet said, “The seller of a million dollar home could save 20 thousand dollars or more if they didn’t have to pay 3% to their agent”:
According to CBS News, people across the nation reportedly paid $100 billion in real estate commissions in 2023.
“The change comes after home sellers sued the association and several major brokerages, alleging that the trade group’s rules for homes listed for sale on its multiple listing service, or MLS, unfairly inflated agent commissions,” the outlet explained:
Robby Braun, an attorney for home sellers in a federal lawsuit in Chicago, recently told the Associated Press (AP), “It may take some time for the changes to impact the marketplace, but our hope and expectation is that this will put a downward pressure on the cost of hiring a real estate broker.”