Real estate brokers scramble for workarounds to an industry-wide legal settlement threatening to upend their businesses in August.
I reached out to one of my local real estate brokers for comment, who was running and rushing off to an R&R Caribbean vacation. Enjoy the delicious rum drinks I said!
The recent settlement involving the National Association of Realtors (NAR) has significant implications for the home-buying process. Here’s a breakdown of what's happening and what it means:
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Current Commission Structure: Traditionally, when selling a home, sellers typically pay a total commission of around 6%—split equally between the seller's agent and the buyer's agent.
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Changes Due to Settlement: As part of the settlement of a class action lawsuit, the NAR agreed to remove the "offer of compensation" field from the Multiple Listing Service (MLS) by August 17. This field currently shows how much commission the seller is offering to the buyer's agent.
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Implications for Buyers and Sellers: Without the visibility of commission offers on the MLS, buyers may need to be more proactive in negotiating their agent's fees. The settlement suggests that buyers should directly pay their brokers to align their interests better, as opposed to sellers paying the buyer's agent.
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Industry Reaction and Potential Resistance: There is resistance within the real estate industry, as these changes could disrupt established practices. Brokerages are exploring ways to convey commission information transparently, potentially through their own websites or in alternative fields within the MLS.
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Consumer Options: While the settlement encourages buyers to pay their own broker fees, sellers can still negotiate to pay both agents' commissions if they choose to do so. The NAR emphasizes that consumers can explore various arrangements through consultation with real estate professionals.
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Future Developments: The details of how these changes will be implemented and the potential workarounds by brokerages are still evolving. Consumer advocacy groups and industry stakeholders continue to discuss these issues.
In summary, while the settlement aims to increase transparency and potentially lower costs for homebuyers, the actual impact will depend on how effectively the changes are implemented and accepted across the real estate industry.
https://www.axios.com/2024/06/27/real-estate-brokers-commissions-nar-se…