NAR Settles Lawsuit
Recent developments in the real estate industry have led to a significant settlement involving the National Association of Realtors (NAR). This brief overview aims to clarify some of the complexities of the case and address widespread misconceptions.
A coalition of homebuyers from Missouri initiated legal action against NAR, alleging that the organization's policies and practices stifled competition and led to inflated property sale prices. The outcome was a judicial decision against NAR, culminating in a $418 million settlement and modifications to operational procedures.
The discourse surrounding these events has been rife with inaccuracies, particularly in the media and on social media. I want to clarify two critical points.
Firstly, it is a misconception that NAR agreed to abolish a purported standard 6% commission rate. In reality, commission fees have always been subject to negotiation. Two agents from different offices are not even allowed to have a friendly discussion about fees over lunch. Agents determine commission rates based on the value provided by agents and the intricacies of each transaction.
Secondly, we don’t anticipate this settlement to influence the commission rates charged by agents directly, at least not in the near future. Contrary to some speculative reports suggesting potential reductions in commission rates, the agreement does not mandate such changes. The traditional practice of listing agents charging sellers and sharing commissions with buyers' agents remains intact, ensuring the accessibility of real estate services to a broader demographic.
This settlement does include two significant changes to how REALTORS operate. Firstly, buyers' agents must secure a written agreement with prospective buyers before showcasing MLS listings. This written agreement will formalize the agent's duties and compensation. This is a good policy and something we’ve always done at American West Realty. Secondly, the listing agent cannot advertise in the MLS how much commission they offer to a buyer’s agent. They can still offer commission and will, but it will be done outside the MLS system. This change may introduce challenges, including potential disparities in commission offers, but it underscores the importance of transparency and fairness in real estate transactions.
While these modifications might reshape some aspects of the real estate industry, they are designed to enhance fairness and transparency. American West Realty and Management remains committed to delivering exceptional services at equitable prices. We welcome any inquiries regarding these changes or any other real estate matters.
## 🌐 Sources
1. [nar.realtor - National Association of REALTORS® Reaches Agreement](https://www.nar.realtor/newsroom/nar-reaches-agreement-to-resolve-nationwide-claims-brought-by-home-sellers)
2. [nar.realtor - The Truth About the NAR Settlement Agreement](https://www.nar.realtor/magazine/real-estate-news/law-and-ethics/the-truth-about-the-nar-settlement-agreement)
