In a groundbreaking development in the real estate industry, a proposed settlement of a massive antitrust case against Realtors is set to shake up the home selling process, potentially affecting how buyers and sellers compensate their agents.
The $418 million deal, unveiled on Friday, March 15, has left members of Southern California’s real estate industry uncertain about the exact details of its impact. Questions have arisen about potential changes such as buyers paying agents directly, signing contracts before viewing homes, and lenders allowing commission costs to be rolled into mortgages.
One major implication of the settlement is the possibility of smaller commissions and lower home prices. The deal bans sellers from offering compensation to buyers’ agents through a Realtor-affiliated MLS, although it remains unclear if it will put an end to the practice of sellers paying buyers’ agents.
This settlement comes on the heels of a $1.8 billion verdict in Kansas City against Missouri home sellers for maintaining a 5-6% commission rate. Under the agreement, the National Association of Realtors (NAR) will pay $418 million to cover more than a million member agents, local associations, and Realtor-owned multiple listing services.
The industry’s response to the settlement has been a mix of confusion, anxiety, and relief as the proposed effective date of July 1 looms, pending court approval. The settlement could lead to buyer-broker agreements becoming more widespread and changing the way buyers compensate their agents.
Furthermore, the deal may result in concessions being listed in MLS listings instead of compensation offers, which would give buyers more flexibility in how they use the concessions. Ultimately, the settlement could lead to more buyer brokers entering the market and bring about changes in agent earnings and commission rates. Stay tuned for more updates as this groundbreaking settlement unfolds.
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