Realtor settlement on commission-fixing could create seismic changes in how Americans buy homes | CNN Business
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The 6% commission, a standard in home purchase transactions, is no more.

The 6% commission, a standard in home purchase transactions, is no more.

In a sweeping move expected to reduce the cost of buying and selling a home, the National Association of Realtors announced Friday a settlement with groups of homesellers, agreeing to end landmark antitrust lawsuits by paying $418 million in damages and eliminating rules on commissions.

The NAR, which represents more than 1 million Realtors, also agreed to put in place a set of new rules. One prevents sellers’ brokers from setting buyers’ agents’ compensation, which critics say led brokers to push more expensive properties on customers. Another ends requirements that brokers subscribe to multiple listing services — many of which are owned by NAR subsidiaries — where homes are given a wide viewing in a local market. Another new rule will require buyers’ brokers to enter into written agreements with their buyers.

The agreement effectively will destroy the current homebuying and selling business model, in which sellers pay both their broker and a buyer’s broker, which critics say have driven housing prices artificially higher.

  • MicroWave@lemmy.worldOPEnglish
    81·
    8 months ago

    Can you elaborate? NY Times and Washington Post are reporting the same:

    American homeowners could see a significant drop in the cost of selling their homes after a real estate trade group agreed to a landmark deal that will eliminate a bedrock of the industry, the standard 6 percent sales commission.

    https://www.nytimes.com/2024/03/15/realestate/national-association-realtors-commission-settlement.html

    The real estate group, which represents 1.5 million real estate agents around the country, said it will pay $418 million over four years to settle several cases, along with agreements to change the rules that plaintiffs alleged supported 5 to 6 percent commissions paid by home sellers. The association said it continues to deny wrongdoing.

    https://www.washingtonpost.com/business/2024/03/15/nar-real-estate-commissions-settlement/

    • helenslunch@feddit.nl
      13·
      8 months ago

      I honestly don’t understand. The best understanding that I can come up with is that buyers “felt” like they couldn’t negotiate with their buyers’ agent, even though they totally could.

      It’s also been said that NAR requires sellers to provide some sort of compensation to buyers, but I’ve never seen this officially documented anywhere either.

      What I know with absolute certainty is that I work in the field and I’ve taken <6% on many occasions, and even <1% on the buyer’s side. If I work a buy/sell deal I don’t even ask for 6%, I just write 5% in. And no one gives a shit. My broker doesn’t like it but I’m the one writing the agreements.

      Broker also requires 3% on buyers side but that’s nothing to do with NAR. And the buyer is totally free to negotiate that with their agent upon completing a representation agreement, which is required.

      • MicroWave@lemmy.worldOPEnglish
        61·
        8 months ago

        You may be right it’s negotiable, but this lawsuit happened because sellers felt they didn’t have a choice:

        The NAR had required homesellers to include the compensation for agents when placing a listing on a multiple listing service. Although NAR has long said commissions are negotiable and that the structure helped making housing more affordable for buyers, critics have long argued that the fees were expected and homesellers felt they would lose buyers if they didn’t offer them.

        …

        Individual sellers often feel powerless to negotiate a better deal for themselves, given the risk that offering lower commissions could cause brokers to steer buyers to other properties, said Robert Braun, a partner in Cohen Milstein’s antitrust practice.

        • helenslunch@feddit.nl
          35·
          8 months ago

          How are we both right when what you quoted says commission is negotiable and the article says NAR requires 6%?

          • MicroWave@lemmy.worldOPEnglish
            41·
            8 months ago

            The CNN article just updated to remove the part about the required 6% and I’ve updated the summary to match.

        • helenslunch@feddit.nl
          26·
          8 months ago

          Thanks for editing your comment

          The NAR had required homesellers to include the compensation for agents when placing a listing on a multiple listing service.

          I’ve already addressed this. This is another lie I’ve heard several times, and no one who has claimed this has ever provided documentation of such policies. I have looked thoroughly myself.

          homesellers felt they would lose buyers if they didn’t offer them.

          That’s because they would. Whose fault is that?