The Carr Report: Breaking down the NAR Settlement…What buyers and sellers need to know

Trending in the financial press is the fact that effective August 17, 2024, there are new rules revolving around Realtors Commission. These new rules are the result of a class action lawsuit against the National Association of Realtors (NAR). These suits were filed on behalf of home sellers and buyers, claiming that the NAR and several major brokerages conspired to maintain high commissions through anti-competitive practices. The lawsuit and subsequent changes involving the NAR stemmed from concerns over the transparency and fairness of real estate commission practices. The core of the legal action focused on allegations that the existing system for broker commissions was anti-competitive and artificially inflated costs for consumers. Specifically, the lawsuits argued that the traditional practice of sellers offering a commission to buyer agents, which is then baked into the home price, created a lack of clarity and competition regarding who pays for those services and how much they cost. Key Issues Leading to the Lawsuit: Commission Structure: Traditionally, home sellers set aside a portion of the home sale price as commission for both the seller’s and buyer’s agents. Critics argued that this practice led to inflated costs because buyers were often unaware of the exact compensation...