- SUMMARY
Following a series of lawsuits alleging it conspired to maintain high realtor commissions, the National Association of Realtors (NAR) has agreed to pay $418 million to settle the claims.
This settlement has significant implications for home buyers and sellers.
NAR’s proposed settlement will end the practice of sellers automatically paying both the seller’s and buyer’s agent fees.
Typically, these fees total around 6% of the home’s price.
Instead, buyers will have to sign a contract directly with their own agent, negotiating a fee that will be taken out of the housing price.
This is expected to lead to decreased commissions, with an average decline from 5-6% to 3-4%.
This change could significantly lower housing prices, as the buyer agent commission will no longer be added to the home’s price.
Home sellers may continue to offer to pay the buyer’s agent fee to attract more buyers, but it is not mandatory under the settlement.
The settlement also raises concerns about potential consequences for home buyers.
Some realtors fear that some buyers may choose to forgo hiring a buyer’s agent to save money, potentially missing out on valuable expertise and protection during the home purchase process.
It’s important to note that the settlement has not yet been finalized and is subject to approval by a judge.
However, the NAR’s proposed changes could bring about significant shifts in the real estate market, leading to lower housing prices and increased competition among realtors.
- Key Takeaways
NAR settlement eliminates automatic payment of buyer agent commission by sellers.
NAR’s proposed settlement will end the practice of sellers automatically paying both the seller’s and buyer’s agent fees, leading to decreased commissions and lower housing prices.
Home sellers may still offer to pay buyer agent fee, but it is not mandatory under the settlement.
Under the settlement, home sellers may continue to offer to pay the buyer’s agent fee to attract more buyers, but it is not mandatory.
Concerns about potential consequences for home buyers who may forgo hiring a buyer’s agent to save money.
Some realtors fear that some buyers may choose to forgo hiring a buyer’s agent to save money, potentially missing out on valuable expertise and protection during the home purchase process.