The National Association of Realtors agreed Friday to a landmark settlement over allegations that they conspired to inflate brokerage commissions. The agreement is likely to reduce costs and change the way Americans buy and sell homes.
The powerful lobbying group will pay $418 million in a national antitrust lawsuit that requires NAR to eliminate decades-old commission rules and allow buyers to negotiate fees with their own agents. They also want to make it easier to negotiate or avoid using agents altogether.
NAR also agreed to eliminate the long-standing practice of requiring home sales to include an upfront offer that sets a commission.
This change could further encourage home sales by lowering fees (typically 5% to 6%), potentially saving buyers thousands of dollars and reducing inflationary pressures and neighborhood It would provide much-needed relief for less affluent individuals and families struggling with housing affordability.
But it could also reduce revenue for traditional real estate brokerages and make employment less profitable and attractive to the more than 1 million members NAR represents.
“What needs to change is the educational standards to weed out the second-rate, bottom-feeder agents who have a real passion for their work and ruin everything for good people who provide a real service.” said Jarrod Randolph, CEO of Real Estate Investments. the company Vestre Partners told the Post.
According to the federal Bureau of Labor Statistics, real estate agents earned an average annual salary of $90,000 as of May 2022, about 50% higher than the national average for all occupations.
Analysts at TD Cowen expect the settlement could reduce fees by 25% to 50%. For a typical American home, whose average price in the fourth quarter of last year was $417,700, he could potentially save $12,500.
The settlement comes four and a half months after a federal jury in Kansas City, Missouri, ordered NAR and several brokerage firms to pay $1.78 billion in an antitrust lawsuit targeting the state agency. Announced. The judge may triple the damages.
Several similar lawsuits have been filed across the country.
Defendants in the lawsuit also include HomeServices of America, owned by Warren Buffett’s Berkshire Hathaway.
The intermediaries sued include Anywhere Real Estate, Compass, Douglas Elliman, Keller Williams, and ReMax.
After the settlement was announced, the stock prices of multiple brokerages fell, some by double-digit percentages. Shares of some homebuilders, including Lennar and Toll Brothers, rose on the news.
The agreement requires court approval.
with post wire
