As the National Association of Realtors settled an antitrust lawsuit on the 15th, the real estate industry’s practice of providing agents with a 6 percent commission on home sales has disappeared.
In the future, the real estate market is expected to change completely as the commission paid by sellers when selling a home will be significantly reduced. On the 15th, the National Association of Real Estate agreed to an antitrust lawsuit, which is expected to bring dramatic changes to the housing market. According to the agreement reached on this day, sellers will no longer be able to list the amount of commission to be provided to the buyer broker when listing a property on MLS, a real estate information platform.
Sellers can still provide a commission to the buyer’s broker, but the previous provision to list the buyer’s commission as a prerequisite for listing on the MLS will disappear. Previously, when selling a home, the seller’s broker had to list the property on MLS, an online real estate information platform established by the National Association of Real Estate and specify the commission that the buyer’s broker would receive. For this reason, there has been a noticeable tendency for buyer brokers to preferentially recommend properties that earn them high commissions to buyers.
However, because of this lawsuit negotiation, the National Association of Real Estate eliminated this regulation, and the commission burden on sellers, who had had to bear a high commission burden due to the decades-long practice of having sellers pay the buyer’s broker’s commission, will be greatly reduced in the future.
The real estate industry predicts that the commission amount of buyer-side brokers will decrease significantly as the seller’s commission burden, which has previously been 5-6 percent, is reduced. As the buyer’s commission decreases, good properties will have no difficulty finding buyers, but properties that are not in good condition are expected to have difficulty finding buyers.
As the commission received by buyer brokers decreases, it is expected that buyers will directly deal with real estate with seller brokers instead of hiring brokers. The result of this negotiation is a response to a court ruling by a federal court jury in Kansas City, Missouri, ordering the National Association of Realtors to pay $1.8 billion in damages on charges of artificially inflating real estate commissions.
The results of this negotiation still need to be approved by a federal court judge, and once approved, changes to broker commissions in the real estate industry will take effect in July.