The National Association of Realtors has agreed to a deal that will eliminate standard sales commissions on homes.
The organization, which sets the guidelines for those transactions, agreed to settle a series of lawsuits by paying $418 million in damages and eliminating its rules on commissions, The New York Times reports this morning.
The lawsuits contend that the NAR and brokerages that required agents to be NAR members violated antitrust laws by mandating that the seller’s agent offer to pay the buyer’s agent, according to the report. The plaintiff’s alleged that the NAR set rules that led to the industry’s standard commission of around 5% or 6%. Without the rate, Realtors likely will have to lower their commissions to remain competitive.
Vicki Spurlock, with Baton Rouge-based Locations Real Estate, says she has yet to use the 6% as the standard.
“I’ve never had the 6% guide me as to what I charge,” she says. “If I have an investor who has done business with me during the course of a couple of years, I may reduce the commission in the beginning.”
Americans pay close to $100 billion in real estate commissions yearly and the United States has some of the highest standard commissions in the world, The New York Times reports..
Spurlock says the lawsuit stems from Realtors representing buyers and sellers in the same transaction.
“About 10 years ago, I decided that I was never going to represent a buyer and a seller in the same transaction,” she says. “They don’t agree that the seller should be paying for the buyer’s representation. I agree. I don’t think the seller should be paying for the buyer’s representation. When the law changed about 10 years ago, I changed with it. Now, I am just a listing agent.”
Spurlock says Realtors can’t discuss the 6% rate because it violates Louisiana Real Estate Commission rules.
A group of Missouri home sellers filed the original lawsuit in April 2019, which ended in an October verdict of $1.8 million. Under the settlement, millions of home sellers could be eligible to receive a small piece of a class-action payout.
A representative of Greater Baton Rouge Association of Realtors was unable to be reached for comment before this morning’s deadline.
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