How you buy a home in South Florida changed in a big way. A lawsuit against the National Realtors Association argued the group violated antitrust laws in the way commissions were set and split between buying and selling agents.
The 6% commission that has been so common for so long will go away.
“There was a cooperative compensation model rule where the MLS was allowing the seller to essentially set the buyer's commission side and that is the big shift,” said Ben Solomon, a real estate attorney based in Brickell. “Now buyers will be able to contract and negotiate those realtors' fees, they may very well be the same rate.”
Negotiating those agent’s commission fees could bring home prices down considerably. Critics say commissions were inflating home prices sometimes by tens of thousands of dollars.
The Hurricane season is on. Our meteorologists are ready. Sign up for the NBC 6 Weather newsletter to get the latest forecast in your inbox.
In a $418 million settlement, the National Realtors Association agreed to prohibit compensation offers on the MLS, allow consumers to negotiate compensation offer off the MLS and let sellers offer buyer concessions on the MLS, something like closing costs.
“There’s already been compression on commission rates. We’ve already seen listing agents taking listings and if I sell on my own I'll take it for less commission, this has been going on for two years or longer,” said Joel Freis, a realtor with EXP Realty.
“We’ve already been telling sellers when we sign a listing agreement, this is what the commission is and on the listing agreement you can agree what to pay a cooperating buyers agent,” said Denise Madan, a realtor with EXP Realty.
Local
Starting now, homebuyers will decide up front what commission to pay their agents and put that into a written contract. Realtors say the fees could end up being close to where they are now.
Experts say the settlement provides closure, ending ambiguity on a national level.
“If this was to drag on it could clog courts in many different jurisdictions and come up with different results, at least this is the NAR settling the matter and that will help calm the markets and get back to business,” said Solomon. “That’s a very positive outcome.”
It is expected to take months to iron out the new rules. Realtors anticipate they will be in place by the middle of July.
