The cost of home sales could drop after real estate agents’ proposed lawsuit settlementby Julian Mark, Aaron Gregg, and Rachel Siegel, Washington PostThe National Association of Realtors has agreed to settle litigation that accused the real estate group of artificially inflating real estate commissions, a move that could dramatically change how much consumers pay during real estate transactions.
If a federal court approves the settlement, the new rules will take effect in July, according to a person close to the settlement talks who spoke on the condition of anonymity because they were not authorized to discuss it publicly.Michael Ketchmark, a plaintiff attorney representing Missouri home sellers in one of the cases, said he was confident that the agreement would fundamentally change the real estate market and help lower the cost of housing and home sales.
Home sellers in Illinois and Missouri alleged in a pair of class-action lawsuits that NAR’s rules artificially inflated commissions by requiring sellers’ agents to make a nonnegotiable compensation offer to list on the Multiple Listing Service, a home-selling database. The proposed settlement does not include real estate agents affiliated with Berkshire Hathaway’s HomeServices of America and its related companies, the NAR said.Home prices are expected to drop. That’s because the sticker price will no longer come with high commissions automatically accounted for. Overall, economists estimate that commissions could now be reduced by 30%.Under the agreement, a seller’s agent will no longer be required to make offers of commission to a buyer’s agent.