The war on real estate agents has begun after the monumental decision by a federal judge to grant a class-action certification in lawsuit against the National Association of Realtors (NAR). The decision has sent shockwaves through the industry, alleging the NAR and major real estate brokerages have conspired to inflate commission rates and limit competition. So what does this mean for the real estate market? Read on to find out.
As the lawsuit claims that the NAR and several major real estate brokerages have worked together to keep commission rates artificially high, home sellers have reportedly been significantly overpaying for real estate agents’ services. The case alleges over $13 billion in damages, representing home sellers who paid a commission between March 2015 and December 2020 in several states, including Arizona, Colorado, the District of Columbia, Florida, Maryland, Michigan, Minnesota, Nevada, North Carolina, Ohio, Pennsylvania, Texas, Utah, Virginia, and Wisconsin.
If the plaintiffs are successful in this lawsuit, unfortunately it could lead to a massive reduction in commission rates for real estate agents. While the lawsuit alleges the market would become more open, competitive and cheaper, real estate agents dispute this allegation. Yet the outcome of this case is undecided and unclear as the NAR and real estate brokerages refuse to back down.
Interestingly, homeowners who paid a commission between March 2015 and December 2020 in the states named in the lawsuit may be eligible to join the class-action lawsuit. If you are a homeowner, it is essential to consult the assistance of a legal professional to determine whether you qualify, other intricacies and any stakes at play. However, you can avoid this issue in the future by seeking out real estate agents with transparent fees and lower commission rates. Researching and comparing commission rates charged by different real estate agents will also allow you to negotiate prices and ensure the best deal.
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