Landmark U.S. Realtor Settlement Offers Hope for Canadian Sellers
The recent $418 million settlement announced by the U.S. National Association of Realtors (NAR) has real estate experts in Canada hopeful for a better deal for home sellers. The settlement, which ended legal claims from home sellers alleging inflated real estate commissions, includes eliminating the standard six per cent sales commission and other commission rules.
In Canada, a proposed national class action lawsuit is making its way through the courts, with the lawyer behind the claim stating that a win would reduce the cost of Canadian homes. The settlement in the U.S. has sparked discussion in Canada about similar changes that could make buying and selling homes cheaper.
University of British Columbia real estate professor Tom Davidoff sees the settlement as a potential game-changer for the real estate industry in Canada. Changes to commission rules could make it more competitive and cheaper for people to sell their homes, ultimately benefiting those looking to buy a home by lowering prices.
The U.S. case against the NAR focused on the requirement for brokers to offer a commission to a buyer’s agent upfront, typically around six per cent. As part of the settlement, the NAR agreed to stop this practice. In Canada, commission structures vary, but typically involve a percentage-based commission split between the seller’s and buyer’s agents.
The proposed class-action lawsuit in Canada alleges a conspiracy among brokerages leading to illegal increases in real estate commissions. While the case has yet to be certified, the lawyer behind the claim is hopeful that the U.S. developments will strengthen the Canadian case and ultimately result in more money in the pockets of home sellers and reduced residential real estate costs across the country.
Overall, the real estate industry in both the U.S. and Canada is facing potential changes that could increase competition among agents, lower prices for buyers, and ultimately result in a better deal for home sellers.
