A proposed settlement to a lawsuit against the National Association of Realtors could fundamentally change the way real estate is conducted nationwide, disallowing home sellers from setting commission rates for buyers' agents and shifting the responsibility to buyers. Realtors in Las Vegas are worried about potential consequences, including increased costs for buyers and potential loss of agents. The upheaval adds to the stress of an uncertain housing market in southern Nevada, with some potential buyers feeling priced out of the market.
Keller Williams Realty Inc. has agreed to pay $70 million to settle more than a dozen lawsuits nationwide over agent commissions, with the proposed settlement also aiming to provide more transparency for homebuyers and sellers. The lawsuits alleged that real estate brokerages engage in practices that unfairly inflate agent commissions. The settlement, which must be approved by the court, includes terms such as making it clear that commissions are negotiable and disclosing compensation structures. This move follows a federal jury's finding that the National Association of Realtors and several large real estate brokerages, including Keller Williams, violated antitrust law, with more than a dozen similar lawsuits pending against the industry.
The real estate industry is facing legal challenges that aim to disrupt the long-standing practice of determining agent commissions and who pays for them. In a recent case, a federal jury ordered the National Association of Realtors (NAR) and major real estate brokerages to pay nearly $1.8 billion in damages for artificially inflating commissions. Another class-action lawsuit has been filed seeking nationwide coverage for anyone who sold a home in the last five years. The focus of the lawsuits is an NAR rule that requires home sellers to pay the commission for the agent representing the buyer, in addition to their own listing agent's commission. Plaintiffs argue that this rule keeps commissions artificially high and costs Americans billions of dollars. The NAR defends the practice, stating that it benefits consumers by giving them access to more buyers and professional representation. The outcome of these lawsuits could potentially reshape the real estate industry's commission structure.
