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A leading real estate industry group has agreed to repeal a policy that has helped set brokerage fees for decades, making it easier for people to pay artificially inflated costs to sell a home. The company moved to resolve a lawsuit alleging coercion.
Under the terms of the deal announced Friday, the National Association of Realtors also agreed to pay $418 million in compensation to home sellers across the country.
Home sellers who have filed multiple lawsuits against NAR and several major brokerages allege that the industry group’s rules governing homes listed for sale on affiliated multiple listing services unfairly inflate brokerage fees. He claimed that there was. The rule also encouraged agents representing buyers to avoid showing clients properties where the seller’s broker was offering a lower commission to the buyer’s agent, they argued. .
As part of the settlement, NAR agreed to no longer require agents advertising homes for sale on the MLS to provide upfront compensation to buyer agents. This rule change now allows individual home sellers to negotiate such offers with buyer representatives outside of the MLS platform, but does not require home sellers’ brokers to disclose such compensation arrangements. There is.
The industry group also agreed to require agents and others who work with homebuyers to enter into written contracts. This is intended to ensure homebuyers know how much their agent will charge for their services.
The rule change, scheduled to take effect in mid-July, represents a major change to the way real estate agents operate dating back to the 1990s, and could lead to home buyers and sellers negotiating lower commissions.
“Although this change may take some time to impact the market, we expect it will put downward pressure on the cost of hiring real estate agents,” said Robbie, a federal litigation attorney.・Mr. Brown said. In 2019, it was held in Chicago representing millions of home sellers.
NAR faced multiple lawsuits over how it set agency fees. In late October, a federal jury in Missouri found that NAR and several major real estate brokerages conspired to require home sellers to pay homebuyer commissions, in violation of federal antitrust laws.
The jury ordered the defendants to pay approximately $1.8 billion in damages, which could exceed $5 billion if the court ultimately awards treble damages to the plaintiffs.
If approved by the court, this settlement would also resolve the lawsuit NAR is facing and similar lawsuits. Targets include NAR’s more than 1 million members, their affiliated multi-listing services, and all intermediaries with residential transaction value of $2 billion or less in 2022 that are primarily NAR members.
“Continuing litigation will ultimately harm our members and their small businesses,” Nikia Wright, NAR’s interim CEO, said in a statement. “No outcome is perfect, but this agreement is the best we can achieve under the circumstances.”
The settlement does not include real estate agents affiliated with HomeServices of America and its affiliates.
Last month, Keller Williams Realty, one of the nation’s largest real estate brokerages, agreed to pay $70 million to settle a brokerage commission lawsuit and change some of its brokerage guidelines.
Two other major real estate brokerages agreed to similar settlement terms last year. In their respective agreements, Anywhere Real Estate Inc. agreed to pay his $83.5 million and Re/Max agreed to pay his $55 million.
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