The U.S. housing market is on the brink of a major transformation this summer, as the National Association of Realtors (NAR) settles an antitrust lawsuit that could reshape the way real estate agents are compensated. With over 1.5 million members nationwide, the NAR agreed to pay a hefty sum of $418 million over the next four years to resolve claims that commissions burdened sellers with unnecessary costs.
While NAR maintains its innocence, the settlement is set to bring about significant changes starting in July. These changes include revamping the way agents charge for home sale transactions, requiring written agreements with buyers for fee transparency, and allowing buyers to negotiate compensation independently.
Experts predict that the impact of these changes may take time to fully materialize. Norm Miller, a real estate professor, believes that most firms will wait until July to adjust their commission-sharing practices. He anticipates a gradual shift in the industry rather than an immediate upheaval.
Steve Brobeck from the Consumer Federation of America foresees two key changes in mid-August that will affect both home buyers and realtors. Buyer agents will need to obtain buyer signatures before showings, and sellers will no longer be obligated to offer compensation to buyer agents for listing on the MLS. This shift could lead to a decline in average commission rates from 5-6% to 3-4%, potentially saving billions of dollars in annual commissions.
Overall, the settlement is expected to bring more transparency and flexibility to the real estate market, giving buyers greater control over agent compensation. While the long-term impact on home prices remains uncertain, the industry is bracing for a period of adjustment as these changes take effect.