In a recent development, the National Association of Realtors (NAR) has reached a nationwide settlement regarding allegations of conspiracy to maintain high agent commissions. According to the Wall Street Journal, this landmark agreement is expected to bring significant changes in how Americans buy and sell homes.
The $418-million deal aims 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 a federal court, most home-sale listings across the country will no longer include upfront offers for buyers’ agent fees. Instead, buyers will have the opportunity to negotiate compensation directly with their agents before any transactions take place.
As part of this settlement, NAR has agreed to abandon its long-standing rule that requires sellers’ listings must include an upfront offer stating how much they are willing pay buyer’s agents. This practice has been criticized by consumer advocates who argue that it hinders negotiations and keeps commission rates higher than other countries around world. On the other hand, NAR maintains that this model allows all buyers access professional advice even if they cannot afford an agent’s services out-of-pocket.
Accordingly reported by WSJ , NAR had been facing severe antitrust liability since last October when a jury in Kansas City awarded $1.8 billion against two national brokerages along with organization itself . The jury found these entities guilty of artificially inflating commission rates through rules governing payment arrangements between buyer’s agents .
This breaking news marks as major milestone for real estate industry as we await further developments on this matter.
