The National Association of Realtors' $418 million antitrust settlement has received preliminary approval from a federal judge, marking a significant step toward reshaping the real estate industry in the United States. Judge Stephen Bough granted preliminary approval in a Missouri court, with a final approval hearing scheduled for November 26.
The settlement has the potential to revolutionize the current real estate business model, which traditionally sees home sellers paying the full commission, typically around 5% or 6%, shared between the seller's agent and the buyer's agent. Critics argue that this practice contributes to inflated housing prices.
Under the terms of the settlement, sellers' agents will no longer be mandated to offer commissions to buyers' agents. While the traditional 6% commission structure may not explicitly end, commissions are expected to decrease as they become competitive and negotiable.
The settlement has sparked debates within the real estate industry, with some warning that the changes could ultimately lead to higher costs for homebuyers. If sellers are no longer responsible for paying buyers' agents, homebuyers may need to cover their broker's commission directly.
Despite the concerns, the NAR maintains that the settlement serves the best interests of all parties involved and aims to preserve consumer choice while protecting its members. The changes outlined in the settlement are set to take effect in late July, but the anticipation of the rule change has already prompted shifts in how some Americans approach buying and selling homes. For instance, some sellers, like Matt Hanley from Minnesota, are opting to offer a 0% commission to the buyer's agent, initiating negotiations over agent commissions earlier in the process.
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