By Adele Uphaus
MANAGING EDITOR AND CORRESPONDENT
The Fredericksburg Area Association of Realtors said this week that it welcomes the proposed settlement agreement reached last week by the National Association of Realtors and litigants in federal court.
“FAAR stands ready to support our REALTOR® members who work so diligently on behalf of their clients as we learn more about implementation of the settlement,” wrote Randy Walther, the organization’s president, in an email to the Advance. “The real estate industry has proven dynamic and flexible over the last century, adapting to many changes in an ever-evolving market. REALTORS® will continue to provide top notch service for buyers and sellers alike, bringing great value through deep market knowledge and strong negotiation skills.”
The agreement reached last week could drive down housing costs by potentially reducing the amount agents for both the buyer and seller can make in commission, according to reporting from the New York Times.
Under the terms of the $418 million agreement, which still must be approved by a federal court, NAR will eliminate its longstanding compensation model, which for years has resulted in a standard 6% commission on the sale price of the home, split between the seller’s broker and the buyer’s agent.
Instead, realtors will now have to work with buyers to enter into written agreements regarding compensation prior to beginning work.
The agreement will end years of lawsuits from home sellers who have argued that the standard commission agreement has caused fees to inflate.
“NAR has worked hard for years to resolve this litigation in a manner that benefits our members and American consumers. It has always been our goal to preserve consumer choice and protect our members to the greatest extent possible. This settlement achieves both of those goals,” said Nykia Wright, interim CEO of NAR, in a statement released last week.
The settlement also “makes clear that NAR continues to deny any wrongdoing in connection with the Multiple Listing Service (MLS) cooperative compensation model rule (MLS Model Rule) that was introduced in the 1990s in response to calls from consumer protection advocates for buyer representation,” the organization wrote in a press release issued last week.
If the settlement is approved, the new rules will go into effect in mid-July, so it will take a number of months before its effects on home prices is understood.
