The National Association of Realtors (NAR) has agreed to do away with policies that for decades helped set agent commissions. As part of the settlement, the NAR agreed to no longer require a broker advertising a home for sale on MLS to offer any upfront compensation to a buyer's agent.
The trade group also agreed to require agents or others working with a homebuyer to enter into a written agreement with them. This is meant to ensure that homebuyers know going in what their agent will charge them for their services.
The National Association of Realtors (NAR) has agreed to do away with policies that for decades helped set agent commissions. As part of the settlement, the NAR agreed to no longer require a broker advertising a home for sale on MLS to offer any upfront compensation to a buyer's agent. The trade group also agreed to require agents or others working with a homebuyer to enter into a written agreement with them. This is meant to ensure that homebuyers know going in what their agent will charge them for their services.
The NAR has been fighting off US antitrust officials and litigation for years regarding alleged anti-competitive practices. But November's verdict marked the association's biggest setback yet which ultimately led to the downfall of the rules that have long protected its compensation model.
One prohibits agents' compensation from being included on listings placed on local centralized listing portals known as multiple listing services (MLS)
Another ends requirements that brokers subscribe to MLS where homes are given a wide viewing in a local market
The agreement effectively will destroy the current homebuying and selling business model, in which sellers pay both their broker and a buyer's broker, which critics say have driven housing prices artificially higher
By some estimates, real estate commissions are expected to fall 25% to 50%, according to TD Cowen Insights
Shares of real estate firms Zillow and Compass both fell by more than 13% Friday as investors feared that lower commission rates for agents could lead to less business for real estate platforms
Homebuilder stocks rose on the news: Lennar shares gained 2.4%, PulteGroup shares added 1.1% and Toll Brothers shares added 1.8%
For the average-priced American home for sale $417,000 sellers are paying more than $25,000 in brokerage fees
Those costs are passed on to the buyer, boosting the price of homes in America
The NAR had required homesellers to include the compensation for agents when placing a listing on a multiple listing service (MLS)
Homesellers who brought lawsuits against the NAR have argued that in a competitive market, the cost of the buyer's agent's commission should be paid by the buyer who received the service, not by the seller
This settlement is subject to a judge's approval and opens up opportunities for alternative models of selling real estate that already exist but don’t have much market share
The NAR has been fighting off US antitrust officials and litigation for years regarding alleged anti-competitive practices. But November's verdict marked the association's biggest setback yet which ultimately led to the downfall of the rules that have long protected its compensation model.
In January 2023, former president Tracy Kasper stepped down after receiving a threat to disclose personal matter unless he compromised his position at NAR. Sears replaced him earlier in the year.
Former CEO Bob Goldberg also resigned two days after $1.8 billion judgment against the NAR and was replaced by Wright.
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The article reports that the National Association of Realtors (NAR) has reached a settlement with groups of homesellers to end landmark antitrust lawsuits. The NAR agreed to eliminate rules on commissions and put in place new rules such as prohibiting agents' compensation from being included on listings placed on local centralized listing portals known as multiple listing services (MLS), ending requirements that brokers subscribe to MLS where homes are given a wide viewing in a local market, and requiring buyers' brokers to enter into written agreements with their buyers. The article states that real estate commissions are expected to fall 25% to 50%, according to TD Cowen Insights. This will open up opportunities for alternative models of selling real estate that already exist but don't have much market share, including flat-fee and discount brokerages. The article also reports on the impact this settlement could have on homebuilder stocks.
real estate commissions are expected to fall 25% to 50%, according to TD Cowen Insights
The NAR agreed to eliminate rules on commissions
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David Goldman and Anna Bahney have a conflict of interest on the topic of Realtors association as they are members of National Association of Realtors (NAR). They also report on landmark antitrust lawsuits that NAR has been involved in which resulted in $1.8 billion damages.
David Goldman is a member of the National Association of Realtors (NAR) and reports on their involvement in landmark antitrust lawsuits.
The article is deceptive in several ways. Firstly, the title implies that the National Association of Realtors (NAR) has agreed to slash commissions for home sellers when in fact they have only eliminated their rules on commissions and will pay damages as a result of lawsuits filed against them by homeowners who argued excessive fees were being charged. Secondly, the article quotes several experts stating that this deal could trigger significant changes in the U.S housing market which is not supported by any evidence presented in the article.
The title implies that NAR has agreed to slash commissions for home sellers when they have only eliminated their rules on commissions and will pay damages as a result of lawsuits filed against them.
Fallacies
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The article contains several fallacies. The author uses an appeal to authority by stating that the National Association of Realtors (NAR) is a powerful organization and has set guidelines for home sales for decades. However, this does not necessarily mean their opinions are accurate or reliable.
> Advertisement SKIP ADVERTISEMENT <br> Powerful Realtor Group Agrees to Slash Commissions to Settle Lawsuits
The cost of selling a home in the United States could shrink as a result of a global settlement with the National Association of Realtors.
Housing experts said the deal, and the expected savings for homeowners, could trigger one of the most significant jolts in U.S. housing market history.
Bias
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The article is biased towards the National Association of Realtors (NAR) and their decision to settle lawsuits by eliminating their rules on commissions. The author presents NAR's perspective as if it were objective fact, without providing any counter-perspectives or evidence that might challenge NAR's position.
The article mentions Norm Miller, a professor emeritus of real estate at the University of San Diego, who says that this deal will blow up the market and force a new business model. This statement implies that there is widespread agreement among experts on the impact of NAR's decision, when it's possible that opinions differ or are influenced by personal biases.
The article quotes Nykia Wright, interim CEO of NAR, saying that their goal was to preserve consumer choice and protect members. This statement implies that NAR is acting in the best interests of homeowners and agents, when it's possible that they are also considering their own financial gain or political influence.
The article states that the National Association of Realtors (NAR) will pay $418 million in damages and eliminate their rules on commissions. This implies that NAR is taking responsibility for the lawsuits and making a concession to homeowners, when it's unclear whether they are truly admitting fault or if this is simply a way to settle the legal disputes.
The National Association of Realtors (NAR) has agreed to do away with policies that for decades helped set agent commissions.
As part of the settlement, the NAR agreed to no longer require a broker advertising a home for sale on MLS to offer any upfront compensation to a buyer's agent. The rule change leaves it open for individual home sellers to negotiate such offers with a buyer's agent outside of the MLS platforms.
The trade group also agreed to require agents or others working with a homebuyer to enter into a written agreement with them. This is meant to ensure that homebuyers know going in what their agent will charge them for their services.
Accuracy
Home sellers behind multiple lawsuits against the NAR and several major brokerages argued that the trade group's rules governing homes listed for sale on its affiliated Multiple Listing Services unfairly propped up agent commissions. The rules also incentivized agents representing buyers to avoid showing their clients listings where the seller's broker was offering a lower commission to the buyer's agent.
As part of the settlement, the NAR agreed to no longer require a broker advertising a home for sale on MLS to offer any upfront compensation to a buyer’s agent. The rule change leaves it open for individual home sellers to negotiate such offers with a buyer’s agent outside of the MLS platforms.
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The article contains several fallacies. The author uses an appeal to authority by stating that the National Association of Realtors (NAR) has agreed to do away with policies that for decades helped set agent commissions and pay $418 million to help compensate home sellers across the U.S.
The article states, 'Under the terms of the agreement announced Friday, the National Association of Realtors also agreed to pay $418 million to help compensate home sellers across the U.S.' This is an example of a fallacy called 'appeal to authority' as it assumes that because something was done by a powerful organization or individual, it must be correct.
The article states, 'As part of the settlement, the NAR agreed to no longer require a broker advertising a home for sale on MLS to offer any upfront compensation to a buyer’s agent.' This is an example of an informal fallacy called 'false dilemma' as it presents only two options when in reality there may be more.
The article states, 'This practice essentially became customary as home listings included built-in offers of “cooperative compensation” between agents on both sides of the transaction.' This is an example of a formal fallacy called 'circular reasoning' as it assumes that something must be true because it has always been done in a certain way.
Bias
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The article discusses a settlement reached between the National Association of Realtors (NAR) and several lawsuits that claim NAR's policies have unfairly propped up agent commissions. The rule changes agreed to as part of the settlement could give home sellers and buyers more impetus to negotiate lower agent commissions, which is a positive outcome for consumers. However, there are also potential negative consequences such as increased complexity in negotiations and potentially higher costs for some homebuyers.
The rule changes agreed to by the NAR could give home sellers and buyers more impetus to negotiate lower agent commissions.
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The article discusses a lawsuit settlement that upended decades-long policies regarding agent commissions in the real estate industry. The National Association of Realtors (NAR) and Multiple Listing Services (MLS) were involved in the case, which resulted in $418 million compensation to home sellers across the U.S.
The article mentions that NAR was a party to the lawsuit settlement.
