In a recent development, the National Association of Realtors (NAR) has reached a nationwide settlement regarding allegations of industry collusion to maintain high agent commissions. According to reports from the Wall Street Journal, this agreement marks significant changes in how Americans buy and sell homes and resolves months of uncertainty and legal threats within the residential real estate sector.
The $418-million deal is expected to make it easier for home buyers to negotiate fees with their agents and could potentially lead more buyers towards not using agents at all. This may result in lower commission rates and possibly force many agents out of the industry.
Pending approval from federal court, listings for homes on sale across most parts of the country will no longer include upfront offers for buyer’s agents, allowing them instead to negotiate compensation directly with their clients. NAR has agreed to abandon long-standing rules that required sellers’ agent fees be set by sellers themselves.
Consumer advocates have criticized this arrangement as it limits buyers’ ability to save money through negotiation while also keeping commission rates higher than those seen in other countries. On its part, NAR argues that this model allows buyers access valuable advice from an agent even if they cannot afford upfront payment.
Accordingly reported by WSJ , last October saw NAR facing severe antitrust liability after a jury in Kansas City awarded $1.8 billion against two national brokerages over claims that current industry practices artificially inflate commission rates through rules governing payment structures for buyer’s agents.
