NWA broker discusses nationwide real estate commission settlement
NORTHWEST, Ark. (KNWA/KFTA) — The National Association of Realtors reached a nationwide settlement that could change the commission structure for real estate brokers.
“It’s benefited a lot of buyers and sellers over the years and made it to where buyers could have representation and the largest purchase of their life,” Jamie Crouch, principal broker at Home Adventure Real Estate.
According to a press release by NAR, the settlement makes clear that NAR continues to deny any wrongdoing in connection with the multiple listing service cooperative compensation model that was introduced in the 1990’s.
This was in response to calls from consumer protection advocates for buyer representation.
“It’s been that way. It’s worked pretty well for a long time, but some sellers got together and decided they didn’t think it was right that they were paying the compensation for the buyer’s agent,” Crouch said.
Right now, a home seller typically pays a 6% commission.
Realtor group agrees to slash commissions in major $418M settlement
NBC News reports this settlement changes that, saying sellers would no longer have to make a compensation proposal to prospective buyers and their agents.
Crouch says she received an email from NAR saying the main portions of the settlement was to say they disagree with the verdict.
“We have done everything we can to represent the public to the best of our abilities with good representation to make sure everybody has access to a real estate professional for such a large purchase,” Crouch said.
The settlement agreement still has to be approved by the federal court.
“We don’t know exactly what’s going to happen. You know, we’re assuming that it’s going to be approved by the courts,” Crouch said.
Experts say this change could put buyers on the hook for paying their agent.
Crouch says she feels like MLS was a good model because it provides representation for all buyers, particularly buyers who don’t have money to pay a real estate professional on their own.
“They’re already coming up with down payment and closing costs. So, adding another expense that they would have to cover really is going to make it difficult for first time home buyers and lower income buyers.” She said.
Regardless of the decision, NAR has agreed to pay $418 million over the next four years to help compensate home sellers across the country, and it agreed to new changes that will go into effect in mid-July.
One of them is to require MLS participants working with buyers to have written agreements with their buyers.
“NAR has made it very clear that they’ve always thought that buyer’s agent should have a separate written agreement with the buyer’s explaining what their services are and how they’re paid,” Crouch said,
The other change is prohibiting offers of broker compensation on the MLS.
“So the listing firm’s no longer going to be putting in there how much they’re going to be paying to the buyer’s firm to bring a buyer to the property,” Crouch said.
In a statement sent to KNWA/FOX24 News, the Northwest Arkansas Board of Realtors says, “We are closely monitoring the proposed settlement of claims being discussed. If the settlement agreement is approved, we are ready and able to implement any modifications which may be required. We look forward to continuing to serve our members and the public with regard to real estate in our area. “
Crouch says the settlement agreement will most likely not change home prices, and she doesn’t think it will change a whole lot.
“It’s just going to change some of the disclosures and ways we practice,” Crouch said.
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