Homeowners could soon find it much cheaper to sell their homes after real estate industry groups agreed to cut fees to settle lawsuits.
The National Association of Realtors (NAR) agreed Friday to pay $418 million over about four years to resolve all claims against the group by home sellers related to brokerage commissions. The deal still needs court approval.
Almost 9 out of 10 home sales are handled by real estate agents affiliated with NAR. The country's largest trade association requires home sellers to determine a commission rate, typically 6%, before listing a home on a real estate database known as the Multiple Listing Service (MLS). There is.
The lawsuit argued that this structure stifled competition and led to soaring prices.
“NAR has worked for many years to resolve this litigation in a manner that benefits our members and American consumers, preserving consumer choice,” said NAR Interim CEO Nikia Wright. , it has always been our goal to protect our members as much as possible,” said NAR Interim CEO Nikia Wright. Friday's statement. “This settlement accomplishes both of those goals.”
How does this affect real estate commissions?
In particular, this landmark deal reduces real estate agents' standard sales commission of 6%, potentially leading to significant savings for homeowners. That group is found to be responsible For inflator compensation.
The New York Times, citing economists, reported that fees could be cut by up to 30%.
This could impact the bottom line of 1.6 million real estate agents, with the $100 billion annual fee pool shrinking by about a third, analysts at Keefe, Bruyette & Woods said. Stated. I have written It said in a report last year on pending litigation.
Standard commission rates in the United States are among the highest in the world. Real estate agents make money by pocketing a portion of the sale price of a home.
Can homeowners save money?
Probably because homeowners typically have to pay a 6% commission when selling a property. However, in some cases, the fee is split equally between the buyer and seller.
For example, if a homeowner sells a property for $1 million; Up to $60,000 in agent fees. The same homeowner would pay approximately $42,000 in fees if her fees were reduced by 30%.
How will it affect the housing market?
Housing experts predict the deal will shake up the housing market and push down overall home prices.
But housing securities analyst Steve Murray is skeptical that home prices will fall significantly as a result of the deal.
“It would have the effect of reducing fees for the seller, which would save the seller money, but it would penalize the buyer,” Murray said. “We do not set housing prices based on this,” he added. He said. “The market determines housing prices.”
Jacob Channell, senior economist at LendingTree, said lower fees and increased negotiability could encourage some new homebuyers, but the market remains weak as mortgage rates remain high. He does not predict that “this settlement will bring back vitality.''
“Housing prices and [mortgage] “Interest rates almost certainly play a much bigger role in home buying choices than the amount you need to pay a real estate agent,” he said.
