The real estate industry is currently undergoing a major shift due to a landmark class-action lawsuit that could change the way Americans buy and sell homes. The National Association of Realtors recently agreed to a $418 million settlement in an antitrust lawsuit, where it was found that the organization and several large real-estate brokerages had conspired to artificially inflate agent commissions.
The lawsuit focused on the NAR’s multiple listing service (MLS), which facilitated compensation rates for both buyer’s and seller’s agents. Historically, when listing a property, the home seller negotiated with the listing agent the compensation for the buyer’s agent, which was then displayed on the MLS. However, sellers were often unaware that they could negotiate this fee and were typically locked into paying the listed brokerage fee.
The proposed settlement would completely remove the commission offer from the NAR’s system, shifting the responsibility away from home sellers to pay or offer commission to both the buyer and seller agents. This change, however, may take some time to materialize, as there is a review process that must be completed before the settlement is fully implemented.
Despite the pending changes, for buyers and sellers currently in the market, it is “business as usual.” Buyers may need to consider new potential charges, such as being responsible for their agent’s fees, as the seller will no longer be responsible for covering commission fees for a buyer’s agent. This could add to the overall costs for buyers, but experts still recommend working with a real estate agent to navigate the homebuying process.
In light of the settlement, it is possible that buyers may be required to sign a contract with their agent early on in the process. This is a precautionary measure to protect buyer’s agents in the market, ensuring that negotiations are agreed upon upfront. Buyers should be aware that they have the ability to negotiate the commission rate and the duration of the contract with their agent.
Overall, the settlement agreement is expected to have a significant impact on the real estate industry, particularly for homebuyers. It emphasizes the importance of understanding the changes and working with a knowledgeable real estate agent to navigate the evolving landscape of buying and selling homes.
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