A federal judge approved the National Association of Realtors’ settlement, marking a major shift in how homes are bought and sold across the US. The $418 million antitrust settlement received preliminary approval from Judge Stephen Bough in a Missouri court on Tuesday, with a final hearing scheduled for November 26.
Experts predict that this settlement could shake up the current real estate model. Currently, home sellers typically foot the bill for the full commission, often around 5% to 6%, which is split between their agent and the buyer’s agent. Critics argue that this drives up housing prices.
In response, the NAR spokesperson expressed satisfaction with the court’s preliminary approval, emphasizing the aim to preserve consumer choice and protect members. The settlement, announced in March, eliminates the requirement for sellers’ agents to offer commissions to buyers’ agents. While the traditional 6% commission may not vanish outright, it’s expected to decrease as commissions become more competitive and open to negotiation.
However, some industry voices caution that this shift might lead to increased costs for homebuyers, who already face significant expenses in home purchases. If sellers no longer cover buyers’ agents’ fees, buyers may need to directly pay their broker.
Though the changes are set to take effect in late July, anticipation has already prompted adjustments in home buying and selling approaches. For instance, some sellers, like Matt Hanley from Minnesota, are proactively adapting. Hanley plans to offer a 0% commission to the buyer’s agent when listing his home, encouraging potential buyers to negotiate their agents’ fees independently.
With the real estate landscape on the brink of transformation, proactive individuals like Hanley are positioning themselves at the forefront of change.
