Local realtors break down $418 Million National Association of Realtors settlement

EVANSVILLE, Ind. (WFIE) – A settlement announced by the National Association of Realtors to the tune of $418 million has sent waves through the real estate world.

The big storyline is if the settlement is approved by a federal court, what’s being called an industry standard 6% commission goes away.

However, speaking to some local Tri-State players, like ERA Broker Liz Miller, that 6% number isn’t necessarily as standard as it seems.

“Every buyer and seller definitely has the option to negotiate out their commission. The only thing that this settlement really does is basically give the seller and the buyer more disclosure on how that is done and when that is done,” says Miller, “so those changes are really more kind of behind-the-scenes so to speak .”

Another big talking point has been transparency.

Gretchen Muchnick, the co-owner of FC Tucker Emge, says the State of Indiana is actually ahead of the curve on the two main points brought on by the settlement thanks to some prior legislation.

“The one is that a buyer-agency agreement is in place. Governor Holcomb has already signed that into law effective July 1. So that’s not new news for us,” says Muchnick, “the other is how the cooperating broker can be compensated, and how that is communicated, and that’s going to be a little bit different than what we’ve done in the past.”

Currently, a home seller is essentially locked into paying a brokerage fee for listing their property on a multiple listing service, or MLS.

When the property sells, half of the fee goes to a listing agent representing the seller, while the buyer’s agent gets the other half.

Mitch Schulz is the President of the Southwestern Indiana Association of Realtors, and says this settlement will make the market more competitive.

“Essentially, the NAR settlement, what that states is the buyer’s broker compensation for what the seller is compensating the buyer, can no longer be advertised in the MLS,” he explained, “that’s what the NAR settlement states.”

One thing all three agreed on was that no matter what happens and whether or not this settlement is approved, it’s still in your best interest to work alongside the professionals when it comes to buying or selling a home.

At this point, the settlement still needs to be approved by a federal judge.