The Future. Last Tuesday, a judge ruled in favor of home-sellers who had sued the National Association of Realtors (NAR) for inflating agents’ commissions. The decision could make buying and selling a home much easier for consumers — and much less lucrative for agents.
Bring down the houseBurnett et al. v. NAR et al. has big implications for the real estate industry.
The NAR will have to pay roughly $5.3 billion in damages for using privileged information to help realtors drive up commissions.
Sellers used to have to post a commission when listing their property for sale — usually between 2.5% and 3.5% of the list price — which the buyer would pay and both agents would split equally.
Now, that might change. Buyers and sellers may be able to pay their agents separately, leading to more price transparency and leverage for consumers, who could save $20 to $30 billion annually from the change.
The NAR is appealing the verdict.
This is a reckoning for the real estate industry. The verdict drove major real estate firms’ stock prices way down and led to a spike in lawsuits filed against the NAR and other companies. And realtors — of whom there’s already a surplus — may change careers as some buyers forgo agents altogether.
But at least they’re not struggling to keep a roof over their heads.
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