The 6% real estate commission dead after Realtor group settles lawsuit

By: Maddie McGay
NorthJersey.com
USA Today Network - New Jersey

..... The cost to sell your home may drop after the nation's largest real estate trade association has agreed to a deal that will eliminate the standard 6 percent sales commission.
..... Announced Friday [03/15/2024] morning, the National Association of Realtors - an industry leader that has been responsible for setting many of the industry's guidelines - has agreed to settle a series of lawsuits by paying $418 million in damages over four years and by elimination its real estate commission rules.
..... "It has always been our goal to preserve consumer choice and protect our members to the greatest extent possible. This settlement achieves both of those goals,' said NAAAAR Interim CEO Nykia Wright.
..... The agreement, which is still subject to court approval, comes in response to claims from home sellers that the NAR, and brokerages that required their agents to be members of the NAR, violated antitrust laws by mandating that seller's agents make an offer of payment to the buyer's agent in a real estate transaction. this rule led to an industry-wide standard commission that home sellers say forced them to pay excessive fees.
..... Currently, most agents in the United States specify a commission between 5% and 6%, paid by the seller. In a real estate transaction, the seller's agent agrees to share a portion of the commission with the buyer's agent when listing the home on the market. For a home priced at $400,000, sellers are paying up to 424,000 in real estate commissions, split between the seller's agent and buyer's agent.
..... "Especially considering the housing market right now and how hard it is for buyers to purchase a home, to add on that they now need to take on, say, a buyer's commission is ridiculous," said Jennifer Woods, an agent with eXp Realty in Montclair. [NJ] "It's already so unfordable for buyers to purchase homes in general, so to add that on top of the purchase price of the house, it seems very unfair to buyers."
..... According to the NAR, the resolution removes most of tis members and many industry stakeholders from any liability in the lawsuit. The organization has also agreed to a new MLS - Multiple Listing service - rule that prohibits the discussion of broker compensation on the MLS. Additionally, the agreement also states that MLS agents working with buyers will now be required to enter into written agreements with their buyers, something the NAR claims it has encouraged members to do previously.
..... Under the settlement, home sellers could be eligible to receive a consolidated payout as part of the class-action lawsuit.
..... "NAR exists to serve our members and American consumers, and while the settlement comes at a significant cost, we believe the benefits it will provide to our industry are worth that cost," NAR President Kevin Sears said. "This will be a time of adjustment, but the fundamentals will remain" buyers and sellers will continue to have many choices when deciding to buy or sell a home, and NAR members will continue to sue their skill, care, and diligence to protect the interest of their clients."

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