Will the National Association of Realtors Settlement Be a Relief to Homeowners, or Just Another Financial Burden?

Everyone knows that buying and selling a house usually turns out to be much more expensive than you expected when you first got emotionally attached to a house that you saw listed on Zillow and contacted a real estate agent about it.  Throughout your conversations with loan officers and real estate agents, it seems like the numbers are always shifting.  Your real estate agent tells you that the seller may not accept your offer, but there is so much more to the story than that.  You also get the feeling that real estate agents have their own professional network that operates according to its own rules, and that outsiders understand little about it.  A recent settlement between the National Association of Realtors and a group of financially beleaguered clients promises to bring more transparency to the process, and it may or may not make real estate transactions more affordable for consumers.  To find out more about the laws and unwritten rules surrounding real estate transactions, contact a Bronx real estate attorney.

The Before Times

There is no official rule that real estate agents must belong to the National Association of Realtors (NAR), but most real estate agents in the United States do.  The NAR maintains a database of available real estate properties called the Multiple Listing Service (MLS).  More than 90 percent of real estate transactions in the United States involve properties listed on the MLS.

Typically, the standard commission that the real estate agents receive is six percent, split between the seller’s agent and the buyer’s agent.  Since almost everything in real estate sales is negotiable, after price negotiations, the average commission paid in the past few years is 5.49 percent.  The seller usually pays the commission, since the seller is the one getting money from the transaction, even though the two parties’ real estate agents split the commission.

All of this makes selling a house very expensive, especially since agents can refuse to list a property on MLS unless the seller agrees to the six percent commission.  In most other countries for which Yahoo Finance was able to find data, the standard commission for real estate agents is between two and three percent.

Will the New Settlement Make Real Estate Transactions More Expensive for Buyers?

Pursuant to the settlement, the NAR must pay $418 to the plaintiffs in a class action lawsuit, homeowners who paid much more than they needed to in order to sell their houses.  The NAR also agreed not to base their decisions about whether to list a property on MLS on the commission amount.  The NAR will also no longer require sellers to pay the commissions for both agents; instead, the buyer and seller could each pay commissions to their respective agents.  This could add tens of thousands of dollars per real estate purchase to the buyer’s expenses.

Schedule a Confidential Consultation With a Bronx Real Estate Attorney

A real estate lawyer can help you navigate real estate negotiations.  Contact Cavallo & Cavallo in the Bronx, New York to set up a consultation.

Source:

finance.yahoo.com/news/realtor-lawsuit-settlement-unburdens-home-sellers-from-heavy-commissions-what-now-for-buyers-090010199.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAJMs6skyHPlqzhbN4Km7789c8fuVAKnxgyfflIdoMTFlrcMfGt0POBbwdpCUxhx_nUHytETUQ6XFvPONVSuI0zqZEyjUu9h3q22QqsObLIw-rP2Akmlpf4j0pdtTluEmfrpkoKUwNb_uRRyeN6mIT5wnbrZqOo3392uVh-JmJwCd