On March 15, the National Association of Realtors announced a settlement to end an antitrust lawsuit. The organization will pay $418 million in damages and agreed to blow up its decades-long practice on commissions paid to brokers.
At the time, the defendants said they would appeal the verdict, but that process would have been a huge risk: Under U.S. antitrust law, the damages could have been tripled to more than $5.3 billion. Losing an appeal would effectively have put the NAR out of commission .When a home was sold, the brokers would be paid 5% to 6% of a home’s sale price, with half of the amount paid to the seller’s representative and half paid to the buyer’s rep.
According to the NAR, MLS “is a private offer of cooperation and compensation by listing brokers to other real estate brokers.” In other words, if you want everyone to see your house that’s for sale, you must comply with the commission structure where both agents are paid by the seller. Presuming that the settlement is approved by a federal court, starting in July, sellers will no longer have to pay the entire freight for the transaction, buyers will be able to directly negotiate fees with their agents and those agreements will have to be put in writing.