The National Association of Realtors (NAR) has made a historic settlement in antitrust lawsuits by paying a staggering $418 million in damages and agreeing to end rules on commissions. This is set to shake up the real estate industry in a major way.
Under the new rules, agents will no longer be able to include their compensation on local listing portals, and buyers’ brokers must have written agreements with their clients. This is expected to lead to a significant decrease in real estate commissions, with estimates ranging from 25% to 50%.
This shift is expected to create opportunities for alternative sales models like flat-fee and discount brokerages. As a result, stocks of real estate platforms like Zillow and Compass took a hit, while homebuilder stocks soared on the news of lower commission rates.
The average brokerage fees for selling a home could potentially fall by $6,000 to $12,000, which will ultimately benefit buyers. This settlement is being hailed as the biggest change in the housing market in a century, according to experts in the field.
The settlement is predicted to lead to a more competitive housing market, giving buyers the ability to shop around for lower commission rates. While some brokers may choose to leave the industry due to the lower fees, top brokers are expected to thrive in this new environment.
The NAR has been under scrutiny for years due to antitrust allegations and leadership turmoil, making this settlement a long time coming. However, it is important to note that not all realtors are covered by this settlement, as HomeServices of America continues to fight the case in court.
In the end, this settlement is set to bring sweeping reforms for millions of Americans involved in the real estate market. Only time will tell how this shake-up will ultimately impact the industry.
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