This is big news as well as a good thing for home buyers and sellers, basically anyone who is NOT a real estate broker should be glad about this lawsuit. In 2003, the National Association of Realtors drafted new by-laws which would ban online and fixed-fee brokers from retrieving NAR real estate listings. It looks like the NAR is hoping to prevent the growth of any type of fixed-fee or discounted brokerage, which would negatively impact a long-standing business practice of charging a percentage of the closing cost.
Right now brokers get 6% and up of the closing price for a home, so if you sold your house for $150,000 you would end up paying $9,000 to be split between the buyer’s and seller’s agents. That is a hefty price to bear for what is essentially a match-making service. This lawsuit might be intended to achieve some settlement where the NAR agrees to cap commissions and work to lower the cost of brokerage fees, which have been steadily increasing. You could even make the argument that increased brokerage fees are incredibly inflationary due to the way they are factored into the purchase price of a home. Action from the federal level is very interesting since the real estate industry is extremely powerful and friendly with the current administration. Everyone should definitely keep an eye on this, especially if the go ahead originated as part of an economic policy directive.
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