Homebuying’s 6% commission is gone after Realtors settle lawsuit – Orange County Register
The 6% commission, a standard in home purchase transactions, is no more.
In a sweeping move expected to reduce the cost of buying and selling a home, the National Association of Realtors announced Friday a settlement with groups of homesellers, agreeing to end landmark antitrust lawsuits by paying $418 million in damages and eliminating rules on commission.
The NAR, which represents more than 1 million Realtors, also agreed to put in place a set of new rules. One keeps homesellers from being forced to offer compensation to buyers’ brokers by prohibiting any requirement that agents must make offers of compensation on a multiple listing service where homes are given a wide viewing in a local market. Another new rule will require buyers’ brokers to enter into written agreements with their buyers.
The agreement will effectively destroy the current homebuying and selling business model, in which sellers pay both their broker and a buyer’s broker that critics say has driven housing prices artificially higher.
“While the settlement comes at a significant cost, we believe the benefits it will provide to our industry are worth that cost,” said Kevin Sears, president of the NAR, in a statement.
Also see: NAR faces competition