CHICAGO (Diya TV) — In a groundbreaking move set to revolutionize the real estate industry, the National Association of Realtors (NAR) has reached a historic settlement, marking the end of the longstanding 6% commission standard in home purchase transactions. This seismic shift, aimed at reducing the cost of buying and selling homes, comes as the NAR agrees to pay $418 million in damages and revamp commission regulations.
Under the new rules, sellers’ brokers are barred from dictating buyers’ agents’ compensation, addressing concerns that this practice skewed towards pricier properties. Additionally, requirements mandating brokers’ subscriptions to multiple listing services, often NAR-owned, have been abolished. A pivotal change mandates buyers’ brokers to establish written agreements with their clients.
NAR President Kevin Sears emphasized the significance of the settlement, stating, “While the settlement comes at a significant cost, we believe the benefits it will provide to our industry are worth that cost.”
The agreement signals a paradigm shift in the home buying and selling business model, wherein sellers previously footed both their and buyers’ agents’ commissions, potentially inflating housing prices.
The landmark deal is poised to significantly reduce standard 6% sales commission fees, offering potential savings for homeowners. With fees potentially slashed by up to 30%, homeowners stand to save thousands of dollars on agent fees.
Typically, homeowners are responsible for paying the commission when selling their property. For instance, on a $1 million home sale, the commission could drop from $60,000 to approximately $42,000.
Housing experts anticipate a transformative effect on the market, potentially leading to lower home prices across the board. However, some analysts remain cautious, suggesting that while commission costs for sellers may decrease, it may not directly impact home prices, as they are largely determined by market forces.
NAR’s agreement also ushers in significant rule changes, prohibiting MLS agents from offering commission payments to buyer agents. Additionally, written agreements between agents and homebuyers will become standard practice.
This settlement, subject to court approval, represents a watershed moment in the real estate landscape. While it encompasses over a million NAR members and affiliated MLS, notable exceptions include real estate agents associated with HomeServices of America.
