LatestReal Estate

Accord Reached to Overhaul Real Estate Commission Structure

In a significant move to address the surge of commission litigations from home sellers, the National Association of Realtors (NAR) has disclosed a groundbreaking accord. This settlement promises substantial changes to the remuneration structure for brokers, potentially leading to a significant decrease in fees disbursed to real estate agents. These fees, typically ranging between 5% and 6% for most residential properties sold in the United States, are set to undergo a transformation.

Market Reaction: Shares Tumble and Surge

News of the settlement sent shockwaves through the market, particularly impacting major players in the real estate sector. Zillow’s shares plummeted by 8.9%, while its competitor, Redfin, experienced a 3.9% decline. The prospect of reduced agent commissions has raised concerns about the operations of such enterprises.

Conversely, CoStar Group, the proprietor of, observed a 4.8% surge following the announcement. This indicates a favorable outlook for platforms competing with, currently overseen by News Corp.

NAR’s Response and Settlement Details

NAR has refuted any misconduct in a press release issued Friday morning, outlining the terms of the settlement. The association, representing approximately 1.5 million members, has agreed to disburse $418 million over roughly four years. This agreement follows a $1.8 billion antitrust lawsuit in Missouri last year, where NAR and several major brokerages were found culpable for colluding to inflate commissions.

NAR’s groundbreaking accord aims to reform broker fees, prompting market turbulence with varied reactions from industry giants, said WSJ Digital.

Commission Regulation Overhaul

The proposed settlement introduces significant alterations to commission regulations, addressing long-standing criticisms. Sellers and their representatives cannot offer broker compensation via the multiple listings service (MLS). Instead, they may negotiate broker compensation off-MLS through discussions with real estate professionals.

Furthermore, MLS participants must utilize buyer-broker agreements. NAR emphasizes the importance of these agreements in helping consumers understand the precise services, value offered, and associated costs. These changes will take effect in mid-July, signaling a pivotal shift in the real estate landscape.

“Stay informed about the latest Economic news.”