In a landmark development in the real estate industry, the National Association of Realtors (NAR) has settled antitrust lawsuits by agreeing to pay a whopping $418 million in damages. This settlement not only marks the end of a legal battle but also brings about significant changes to the way real estate transactions are conducted.
One of the major changes resulting from the settlement is the elimination of rules on commissions. Moving forward, agents’ compensation will no longer be included on listings, and written agreements with buyers’ brokers will be required. This move is expected to lead to a drastic reduction in real estate commissions, with estimates suggesting a 25% to 50% decrease. This in turn opens up opportunities for alternative models in the industry.
The news of the settlement has had a positive impact on homebuilder stocks, with many seeing a rise in their value. The average seller currently pays over $25,000 in brokerage fees, a figure that could potentially decrease by $6,000 to $12,000 as a result of the changes brought about by the settlement.
Described as the biggest change to the housing market in a century, the settlement is set to bring sweeping reforms for millions of Americans. There is also the possibility of a mass exodus of brokers as a result of the changes. The NAR, which has been under scrutiny from US antitrust officials, may also face further implications in terms of government scrutiny of the brokerage industry.
The NAR has also been dealing with severe leadership turmoil, with the resignations of former president Tracy Kasper and former CEO Bob Goldberg. These developments have added to the uncertainty surrounding the future of the organization in the wake of the landmark settlement. Stay tuned to Poh Diaries for more updates on this evolving situation.
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