Homeowners could pay less to sell their homes after a realtors’ group agreed to cut commissions to settle lawsuits filed against it.
On Friday, the National Association of Realtors agreed to pay $418 million in damages and to eliminate its rules on commissions.
The $418 million agreement will make it easier for home buyers to negotiate fees with their own agents and could lead more buyers to forgo using agents altogether, which has the potential to drive down commission rates.
Most real estate agents in the United States get a commission of 5 or 6 percent, which is paid by the seller. When the buyer has an agent, the seller’s agent agrees to share a portion of the commission with them when the home is listed for sale.
The NAR agreed to abandon longstanding industry rules that have required most home-sale listings to include an upfront offer telling buyers’ agents how much they will get paid. Under a system in place for a generation, sellers have typically set buyers’ agents fees. Consumer advocates say the arrangement has prevented buyers from negotiating to save money and kept commissions in the United States higher than in most of the world.
“Buyers were cut out pretty much entirely from negotiating commissions and I think this will invite them under that tent,” Benjamin Brown, co-chair of the antitrust practice at Cohen Milstein, one of the firms representing plaintiffs in the Chicago case, said in a statement.
A federal court still needs to approve the deal.
Good to know. We’re thinking of putting our house up for sale one of these years, hopefully not too soon.
Yes, it’s great for consumers that they can now negotiate realtor’s fees.
I don’t think I will need to worry about buying or selling a house anytime soon, or ever again. But I feel for both home buyers and sellers who get gauged.