Ethical, honest, and transparent are all crucial characteristics of trustworthy real estate agents. Striving to land the best possible deal for a client while adhering to regulations and remaining honest and transparent throughout every transaction has always been a priority for us.
This year the National Association of REALTORSĀ® and some top residential brokerages were found liable for artificially inflating commissions on home sales. These organizations will be required to pay $1.78 billion in damages, while the ruling could also reverse a common industry trend involving agents boosting commissions as home prices rise.
At Bee Realty Corp, operating ethically and honestly has always been core to our mission. While this recent ruling could result inĀ major changes for some in the industry, we remain largely unaffected because of our dedication to compliant business practices.Ā This is just another reason why clients across Volusia County trust usĀ withĀ their real estate transactions.
If you’re planning to buy or sell your home, you should know if this recent industry change will impact your sale.
How The NAR Settlement Impacts Buyers And Sellers
In November of 2024, a federal judge officially approved a settlement that will redefine how REALTORSĀ® are paid. The case, which started last year, involved a group of homeowners who argued that the National Association of REALTORSĀ® (NAR) rules were inflating commissions and leading to excessive fees when they sold their properties. This ultimately resulted in the NAR and other organizations paying $1.8 billion in damages.
A key component of the complaint was based upon the NAR requiring sellers to pay an offer of commission to the buyer’s agent — a practice that has been around for decades. During a traditional home sale, the seller used to pay a 5% to 6% commission, which was divided between the seller’s agent and the buyer’s agent. This industry practice kept commissions higher than they would have been otherwise. The ruling also requires the removal of compensation offers from the MLS.
Going forward, sellers will no longer be responsible for paying the buyer’s agent’s commission. Instead, buyers will have the ability to negotiate the commission terms with their real estate agent prior to making an offer on a home. This will help generate more competition among agents while lifting a substantial financial burden on sellers.
The good news for sellers is that they’ll save about 3% of the home sale price in fees, which could work out to be about $10,000 to $15,000 based on the average home price. However, this change will put more pressure on buyers, who are already dealing with high home prices and rising interest rates. This could also make it even more difficult for first-time buyers with limited savings to acquire their first home.
How this change will play out in the market remains to be seen, but many industry experts believe it will eventually lead to lower agent commission payments in the long run. Many also expect it to result in declining home prices as buyers continue to face mounting pressures.
Trust Bee Realty To Help You Navigate Market Changes
The ultimate objective of this ruling was to empower real estate agents and consumers to negotiate services and compensation while adhering to principles of transparency, competition, and choice. These objectives are very much aligned with the core principles at Bee Realty Corp.
It will take some time for the market to adapt to these changes, and how they will impact buyers and sellers long term remains to be seen. But the real estate market is always changing, which is why it’s so important to have an experienced brokerage and qualified REALTORSĀ® in your corner.
Bee Realty Corp can help you navigate the complexities of the real estate market. Whether you’re buying or selling, we can help you understand how changes in real estate laws and policies affect your unique situation. We’re one of the most honest and transparent brokerages around, and we’re above board in all that we do. If you’re ready to get started, give us a call today.
