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Over the weekend, The New York Times quoted economists as saying that U.S. brokerage fees could be cut by as much as a third after real estate industry groups agreed to cut fees to settle lawsuits. It was reported.
The National Association of Realtors (NAR) on Friday said it would pay $418 million (£328.2 million) over about four years to resolve all claims against the group by home sellers related to brokerage commissions. agreed. The deal still needs court approval.
Nearly 9 out of 10 residential real estate sales in the United States are handled by real estate agents affiliated with NAR. The country’s largest trade association requires vendors to determine a commission rate, typically 6%, before listing a home on a real estate database known as the Multiple Listing Service (MLS).
The lawsuit argued that this structure stifled competition and led to soaring prices.
“NAR has worked for many years to resolve this litigation in a manner that benefits our members and American consumers. Preserving consumer choice and protecting our members to the greatest extent possible has always been our priority. that goal,” NAR Interim CEO Nikia Wright said in a statement Friday. “This settlement accomplishes both of those goals.”
Standard commission rates in the United States are among the highest in the world. But this landmark deal lowers real estate agents’ standard sales commission of 6%, potentially leading to significant savings for homeowners. The group was found responsible for inflating agents’ compensation.
Analysts at Keefe, Bruyette & Woods said in a report last year that lower fees could impact the revenue of 1.6 million real estate agents, costing them $100 billion (about £7.85 trillion) a year. He said the fee pool could shrink by about a third. Pending litigation.