The National Association of Realtors has signed off on a huge deal that some say "will blow up" the housing market. The New York Times has seen a copy of the $418 million settlement that would get rid of the standard 5% or 6% commission fee for real estate agents, allowing homebuyers to negotiate their own rates. Industry experts tell the paper that the move "could trigger one of the most significant jolts in the US housing market" in a century. The deal still needs a federal court's approval, but once that happens, "listings of homes for sale in most parts of the country would no longer include upfront offers to buyers' agents" starting this summer, and buyers would be able to work out any applicable fees directly with their agents, notes the Wall Street Journal.
The United States claims among the highest commission fees in the world for real estate agents, paying out $100 billion in such fees each year. In other nations, commission fees typically fall somewhere between 1% and 3%. In a separate article, the Times outlines a few of the ways that the new settlement could affect things in the industry, including lower home prices, the possible defection of up to 1 million agents, and a retreat from "steering," where agents lure buyers to more expensive homes so that they take home a higher commission. "While the settlement comes at a significant cost, we believe the benefits it will provide to our industry are worth that cost," NAR President Kevin Sears says in a release. (More National Association of Realtors stories.)
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