The National Association of Realtors (NAR) has reached a significant agreement to eliminate policies that have artificially driven up agent commissions, settling lawsuits brought against them by home sellers. As part of the settlement, the NAR has agreed to pay $418 million to compensate home sellers across the United States.
The rules governing homes listed for sale on NAR-affiliated Multiple Listing Services have long been criticized for inflating agent commissions and incentivizing higher offers. One major change resulting from the settlement is that the NAR will no longer require upfront compensation to be offered to a buyer’s agent when advertising a home on MLS.
Agents working with a home buyer will now be required to enter into a written agreement outlining their fees, providing more transparency to home buyers. The changes are set to take effect in mid-July and could potentially lead to lower agent commissions as buyers and sellers negotiate.
Analysts predict that these rule changes may result in lower agent commissions and even lead some home buyers to forgo using an agent altogether. The settlement also resolves lawsuits filed against the NAR for setting agent commissions.
In addition to the NAR, some major real estate brokerages including Keller Williams Realty have agreed to pay settlements in similar lawsuits. These settlements are intended to address antitrust concerns and bring more transparency and flexibility to agent commissions in the real estate industry.
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