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NAR lawsuit setllement over commissions

CHANGES IN REAL ESTATE COMMISSIONS 

Have you heard about the National Association of Realtors and the lawsuit that will change real estate commissions? If so and if you're like most folks, you aren't real clear on what it all means.

Most of the media has gotten it all wrong about NAR’s settlement.  And the truth is, there's still tons of questions on how all this will be handled and how it will change things.

What do we know about the changes in real estate commissions? 

Here's the facts:

-The National Association of Realtors (NAR) has agreed to pay $418 million over four years in a lawsuit settlement where a federal jury ruled the organization had conspired to inflate commissions. None of us are really sure how that even happened. What did the jury not understand?  MLS's have nothing to do with commissions. Commissions have always been 100% negotiable between the seller and their listing agent.  Sellers have always paid ALL the commissions and would instruct the listing agent how much of the total commission to offer to other agents for procuring and representing a buyer, and that amount was published in the MLS. 

-The parties agreed that commissions for buyer's agents will  no longer be published in MLS. (They can/will still exist,  just can't be published). How this helps make things better for consumers is lost on me.

-Buyers agents must now enter into a written agreement with buyers that will set the amount of the commission paid to the broker or agent, whether it is offered by the seller or not. In fact, agents cannot even show homes to prospective buyers without this written agreement. This isn't a bad thing. As long as people know exactly what and why they are signing. 

How this all works out and how it will affect consumers is kinda fuzzy at this point. But when you boil it all down, I think that all they've done is convoluted and confused the issue so that commissions are even more complex and complicated for consumers. And at the end of the day, nothing is really going to change that much. There will still be commissions, they will still be negotiated. 

If your agent can't explain all this and make it easy to understand, please call me. It's not that hard. 

Here's some good reading to help understand the issues, and questions going forward:

National Association of REALTORS® Reaches Agreement to Resolve Nationwide Claims Brought by Home Sellers

The Truth About the NAR Settlement Agreement

I'm a Realtor. NAR settlement may not be as good for home buyers and sellers as they think.

Let's talk if you have questions!