National Association of Realtors Faces $418 Million in Damages and Implements New Rules Following Lawsuit
In a groundbreaking development in the real estate industry, the National Association of Realtors, a major trade giant with over $1 billion in assets, has announced a $418 million settlement in response to a lawsuit alleging unfair and inflated broker commissions. The lawsuit, filed by Missouri home sellers in 2019, resulted in a verdict of $1.8 billion, potentially tripling to $5.4 billion due to antitrust violations.
As a result of this landmark settlement, tens of millions of home sellers may be eligible to receive a portion of the consolidated class-action payout. Additionally, the lawsuit has sparked similar legal actions across the United States.
In light of these developments, the National Association of Realtors has implemented new rules, including a policy modification that prohibits agents from proposing commissions on a multiple listing service (MLS). Instead, home sellers can now negotiate commission deals directly with the buyer’s agent outside of the MLS system.
Nykia Wright, NAR’s interim CEO, expressed that the organization has worked diligently to reach a resolution that benefits both members and consumers, emphasizing the importance of preserving consumer choice.
This shift in the real estate landscape is expected to have a significant impact on home buyers and sellers. Historically, real estate brokers in the U.S. have charged a standard 6% commission on house sales, a significantly higher rate compared to other countries. With these new changes, experts anticipate a reduction in buyer costs and increased homebuying activity.
While the revised payment terms aim to reallocate broker fees and make it easier for buyers to negotiate with brokers, the high cost of homeownership in the U.S. remains a concern for many Americans. Despite the potential benefits for consumers, the new system may also lead some buyers to forego using brokers altogether.
Overall, the real estate industry is poised for a transformation as these changes take effect in the coming months. With the goal of enhancing consumer choice and protection, the National Association of Realtors is paving the way for a more transparent and competitive real estate market.
