OAN’s James Meyers
11:00 AM -Friday, March 15, 2024
A massive settlement has been approved for home buyers in the United States.
The National Association of Realtors (NAR) has agreed to a Real Estate changing settlement that eliminates real estate brokers’ long-standing automatic commissions, which are typically up to 6% of the purchase price.
Now home buyers and sellers would be able to negotiate fees with their real estate agents up front.
If the $418 million settlement is approved by a federal court, experts believe that the number of real estate agents will begin to decrease, which will continue to drive down commission prices.
“For years, anti-competitive rules in the real estate industry have financially harmed millions,” said Benjamin Brown, managing partner at the Cohen Milstein law firm and one of the settlement’s negotiators. “This settlement bring sweeping reforms that will help countless American families.”
The NAR acknowledged the pending settlement in a statement Friday and denied any wrongdoing.
“NAR has worked hard for years to resolve this litigation in a manner that benefits our members and American consumers,” said Nykia Wright, interim CEO of NAR, whose previous chief stepped down late last year amid fallout from a federal lawsuit.
“It has always been our goal to preserve consumer choice and protect our members to the greatest extent possible. This settlement achieves both of those goals,” Wright said in the statement.
Currently, a home seller has to pay a brokerage fee for listing their property on a Multiple Listing Service, which is usually 5% or 6% depending on where they are located on the map.
If the settlement is approved, brokerage commissions would be stripped from MLS sites and opened up to negotiation with sellers. Additionally, home buyers would be able to negotiate fees more easily if they choose to sign up with a broker.
Furthermore, the new brokerage-fee changes will begin to take effect in the next few months once it is fully approved. A preliminary hearing to approve the deal is slated to take place in the next few weeks.
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