There have been a lot of headlines recently about the Class Action Lawsuit against the National Association of Realtors (NAR) and a potential settlement that has been reached. We won't know until July if this settlement will actually be accepted as it is currently outlined, but here is my take on what all this means:
As part of the settlement, NAR will no longer require seller's agents to offer compensation to Realtors who represent buyers. I'm getting a lot of questions about whether the settlement will result in drastic changes to the real estate industry as many headlines indicate. I don't believe that the settlement will eliminate commissions and reduce the cost of real estate, as some of the news stories are reporting. Most buyers want to be represented by a buyer's agent who is their advocate and buyer's agents want to be paid for their efforts. The big change is that buyer agents will no longer be able to assume that a seller and/or listing brokerage will pay their commission. As a result of the settlement, there will need to be more conversations about commission rates and whether they will be paid by sellers or buyers in any given transaction. In most situations, I believe sellers will still offer a commission to buyer's agents in order to help get their home sold. In some situations, there may be more negotiation that results in a lower commission and in some cases it will result in a higher commission.
Here is an article from a real estate industry perspective that goes into greater detail about how the settlement will affect the real estate industry. To read the full article, click here.
If you have any questions about my take or the above article, please contact me to discuss this subject in greater detail. Thanks.
Rich