Chicago, Illinois – A recent settlement in a case against US estate agents has the potential to impact the cost of buying and selling houses across the country. The National Association of Realtors (NAR) and various property companies faced allegations of artificially inflating sales commissions, resulting in lawsuits and legal battles.
After facing scrutiny over their practices, the NAR agreed to a settlement that includes $418 million in damages. This agreement aims to lower commissions and make it easier for buyers to negotiate fees, potentially leading to reduced buying and selling costs within the housing market.
With the standard 6% commission on the sale price in the US housing market, the median house price of $417,700 translates to over $25,000 in commission fees, which often get passed on to buyers. However, this settlement could bring about more competition in the sector, as well as increased opportunities for negotiation on fees and rates.
The settlement comes after a federal jury in Missouri previously ordered the NAR and brokerage firms to pay $1.78 billion, prompting the need for changes in industry practices. While the settlement is subject to final approval by a court, it is expected to impact around 1 million members covered by the NAR.
One significant change resulting from the settlement is the potential for increased flexibility for buyers to negotiate lower commission rates or flat-price fees on home sales. This shift in the market dynamic could ultimately drive down transaction costs and provide more consumer choice in the process.
Despite the positive implications of the settlement, unresolved lawsuits against property companies and the possibility of a federal investigation into the NAR still loom over the industry. Similar legal actions in Canada against estate agents regarding buying and selling fees further highlight the need for transparency and fair practices within the real estate market.