This article is reprinted by permission from NextAvenue.org. When I used to work and was quite busy, I would read The Wall Street Journal every day and listen to NPR on my daily commute. I used to think I was fairly well-informed. Now that I’m retired and my time is virtually unlimited, I can’t be bothered to keep up on the news.
Therefore I was completely surprised when I read in Fortune that on Oct. 31, 2023, the National Association of Realtors (NAR) lost a $1.8 billion lawsuit brought by 500,000 home sellers in Missouri and some border towns. The suit was about whether Realtors artificially inflate their commissions. After reading a number of articles about the lawsuit I am still unsure what the judgment will actually mean for real estate buyers and sellers going forward. More: A century-old real estate practice could soon end. Here’s how home sellers and buyers could be affected. I do know what it will mean for lawyers: they will sue the NAR in other regions. Due to the speed of the American justice system it also will mean we should expect to wait several years for everything to shake out.Brokers set their own rules According to Fortune, “The focus of the lawsuits is an NAR rule that requires that home sellers offer to pay the commission for the agent representing the home buyer when they advertise their property on a local Multiple Listing Service (MLS), where a majority of U.S. homes are listed for sale.” If the outcome of this lawsuit means that the home buyer will be responsible for the remuneration of the buyer’s agent, then this lawsuit may be beneficial to buyers and sellers. See: Real-estate industry groups were found guilty of inflating commissions. Here’s what that could mean for homeowners. A report by analysts at the investment bank Keefe, Bruyette & Woods estimated the decision in this lawsuit could cut commissions by 30% from, say, 6% of the sales price to 4.2%. Though in the end, I’m doubtful that this will mean anything more than a bunch of lawyers driving around in their new BMWs. Why the pessimism?Playing the game, knowing you’ …
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Therefore I was completely surprised when I read in Fortune that on Oct. 31, 2023, the National Association of Realtors (NAR) lost a $1.8 billion lawsuit brought by 500,000 home sellers in Missouri and some border towns. The suit was about whether Realtors artificially inflate their commissions. After reading a number of articles about the lawsuit I am still unsure what the judgment will actually mean for real estate buyers and sellers going forward. More: A century-old real estate practice could soon end. Here’s how home sellers and buyers could be affected. I do know what it will mean for lawyers: they will sue the NAR in other regions. Due to the speed of the American justice system it also will mean we should expect to wait several years for everything to shake out.Brokers set their own rules According to Fortune, “The focus of the lawsuits is an NAR rule that requires that home sellers offer to pay the commission for the agent representing the home buyer when they advertise their property on a local Multiple Listing Service (MLS), where a majority of U.S. homes are listed for sale.” If the outcome of this lawsuit means that the home buyer will be responsible for the remuneration of the buyer’s agent, then this lawsuit may be beneficial to buyers and sellers. See: Real-estate industry groups were found guilty of inflating commissions. Here’s what that could mean for homeowners. A report by analysts at the investment bank Keefe, Bruyette & Woods estimated the decision in this lawsuit could cut commissions by 30% from, say, 6% of the sales price to 4.2%. Though in the end, I’m doubtful that this will mean anything more than a bunch of lawyers driving around in their new BMWs. Why the pessimism?Playing the game, knowing you’ …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]