“In our view, the combination of mandated buyer representation agreements and the prohibition of blanket compensation offers made by listing agents and sellers should result in significant price competition for buyer agent commissions,” the analysts wrote Friday.
While allowing homebuyers to negotiate a better agent fee, the rule changes require them to consider how to pay their representative. Buyers may still ask sellers for a concession to cover buyer's agency fees. A house seller with various bids may decline such a request or choose a bid from a buyer who isn't asking for a concession.
“The real solution is for the industry to work to remove regulatory barriers that make it difficult for buyers to include this compensation in their mortgages,” said Consumer Federation of America senior fellow Stephen Brobeck.
Multiple lawsuits challenged NAR agent commissions. In late October, a Missouri federal jury determined that the NAR and other prominent real estate brokerages conspired to require home sellers to pay homebuyers' agent commissions, violating federal antitrust law. The jury awarded approximately $1.8 billion in damages, and more than $5 billion if the plaintiffs received treble damages.
If accepted by the court, the settlement settles that and other NAR cases. In 2022, over one million NAR members, its affiliated Multiple Listing Services, and all brokerages with a NAR member as a principal had a residential transaction volume of $2 billion or less.
“Ultimately, continuing to litigate would have hurt members and their small businesses,” interim NAR CEO Nykia Wright said. While there is no ideal conclusion, this agreement is the best we can do under the circumstances.”
The settlement excludes HomeServices of America and associated company real estate agents. Keller Williams Realty, one of the nation's top real estate brokerages, settled agent commission complaints last month by paying $70 million and changing some agent restrictions.
Two other major real estate brokerages settled similarly last year. Re/Max agreed to pay $55 million and Anywhere Real Estate Inc. $83.5 million.
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