The National Association of Realtors and several brokerages have struck big money deals to settle an array of class-action lawsuits around real estate commissions.
It might become harder for homebuyers to figure out how to pick the right agent to work with in the wake of the settlements. That’s because the settlements, which now add up to hundreds of millions of dollars, will also bring with them changes in how buying agents are paid, how homes are listed and may require more buyers to pay for an agent directly when buying a home. And if buyers potentially shell out thousands of dollars or more, they will have to do their own due diligence.
The fight over what plaintiffs alleged to be a widespread conspiracy to keep real estate broker fees high led to a wave of lawsuits across the country and a jury verdict of $1.78 billion in November against HomeServices of America Inc. and other big brokers. Experts have said the settlements will transform the industry, although to what extent remains to be seen.
“Due to the old NAR commission structure, it was difficult for homebuyers, especially, to determine who would be an effective Realtor to help them,” said Brian Mollo, a Realtor and CEO of Trusted House Buyers. “While on the listing side, it was a bit less confusing as third-party platforms like Zillow would help consumers see the sales data for individual agents … the buy side of the transaction was always a bit shrouded. In fact, the vast majority of real estate agents have been coached to focus on listing homes, essentially ignoring buyers.”
Before signing with an agent, interview at least three, Mollo said, adding those agents need to demonstrate how they will earn their commission.
