Saturn Title Insurance Company

The NAR Settlement: What Is Going to Change? So, the National Association of Realtors (also known as NAR, which if you say it out loud and hold the "R", you really sound like a pirate) was sued over alleged anti-trust practices. For years, Sellers have been paying the entire commission, both the Seller's agent's portion and the Buyer's agent's portion. Sellers would agree to a total commission to be paid to their agent and then Seller's agent would "offer" a portion of that commission (usually 2.5% of the sales price) to the Buyer's broker (which for years has been referred to as the Selling Broker as a way to really create clarity and to avoid confusing anyone). In this lawsuit, the argument was made that the Buyer's agent, who works for the Buyer, should be paid by the Buyer and not the Seller. Therefore, by separating the obligation to pay the brokers' commissions between the parties, it was argued that this change would increase competition and ultimately result in reducing the commissions paid by Sellers to sell their properties. Following a two-week trial, a federal jury did in fact find the NAR guilty of conspiring to artificially inflate sales commissions on home sales and ordered NAR to pay a Eugene Levy eyebrow raising $1.78 billion in damages (which is equivalent to most NBA contract extensions these days). However, because the verdict was reached under federal antitrust laws, the court had the power to triple this damage award to more than $5.3 billion dollars (which is about the amount that the Chicago Bears will probably offer QB Caleb Williams after his rookie contract expires). Wisely, the NAR agreed to settle the matter before the court could decide whether it was going to increase the damages award. NAR settled the matter for a paltry $418 million and implemented a series of rule changes that take effect August 17th (in a month and a half). Particularly interesting was NAR's agreement to eliminate the requirement that the Seller's agent had to offer a portion of the sales commission as compensation to the Buyer's broker. This settlement will result in the following new rules: 1. Listing agents will be PROHIBITED from offering ANY compensation to Buyer's agents through the MLS (Multiple Listing Service). 2. All Buyer's agents will be required to enter into a written agency agreement with their clients specifically detailing how they will be compensated for thier service. Now that the Buyer's agents will be forced to seek payment for their services from their clients, the million dollar question (or at least the 2.5% of the sale price question) becomes how will the Buyer respond, and will this result in an significant savings for the Seller? (though some will arguing that this is going to save money for the Buyers and will make it more affordable for them to purchase homes - please explain that logic to me!) Let me know your thoughts! Do you think things are going to change relative to the payment of commissions?