Skip to content
Home » News » Real Estate: National Association of Realtors settlement will change home buying forever

Real Estate: National Association of Realtors settlement will change home buying forever

  • / Updated:
  • Staff Report 

A Groundbreaking Change Will ‘Reset’ The U.S. Housing Market

The U.S. housing market is set for a seismic shift following a landmark $418 million settlement between the National Association of Realtors (NAR), several real-estate brokerages, and home sellers. This deal comes after numerous lawsuits accused the industry of conspiring to maintain high agent commissions, marking a dramatic turn from century-old practices of how real estate agent fees are paid. The news also comes after the Biden Administration announced a proposal to provide homebuyers with a tax break to purchase a new home.

Housing market and homes for sale

Impact on Home Transactions

Home sellers and buyers across America are poised to experience significant changes in how they engage with real estate transactions. Here’s a breakdown of what’s changing:

For Sellers:
  • Sellers will no longer be obligated to cover the buyer’s agent fees, potentially lowering overall commissions. This change could lead to savings of 25% to 50% on commissions, which traditionally ranged between 5% to 6% of the home’s sale price. Sellers can negotiate lower fees for their agents, keeping more proceeds from their home sales.
For Buyers:
  • Buyers may now have to directly negotiate and pay their agents, altering the traditional dynamic where sellers indirectly covered these costs. This shift could introduce upfront costs for buyers, potentially making home purchases more challenging for first-time and less-wealthy individuals.
For Real-Estate Agents:
  • The settlement likely means buyer’s agents will need to justify their value more explicitly to clients. Agents offering superior service or expertise may find themselves in a position to command higher fees directly from buyers.

The Future of Homebuying and Selling

The settlement is expected to introduce more transparency and flexibility in real-estate commissions. Buyers and sellers will have the opportunity to negotiate agent fees more openly, potentially leading to varied compensation models based on the service level provided.

While the full impact of these changes may unfold over several years, the settlement marks a decisive move towards modernizing the real estate market, making it fairer and potentially more affordable for millions of Americans.

Next steps include the official approval of the settlement, with changes anticipated to start rolling out in July. Both homebuyers and sellers should prepare for a new era in real estate transactions, where negotiation and transparency play key roles in determining agent fees.

Categories: News