The NAR Lawsuits and what they mean for commissions paid by home sellers
The landscape of real estate commissions is undergoing trajectory altering changes right now. Major class action lawsuits have already been settled in the tens of billions of dollars, and the US Department of Justice recently stepped in on a number of other similar lawsuits to consolidate the fight back against a predatory, competition fixed industry.
What does this mean to the every day For Sale by Owner (FSBO)? Let's dig into these and how they may impact your strategy.
The big developments with Real Estate Commissions
- Some clarification from Fannie Mae and Freddie Mac
- Exclusion from Seller Concessions Limits: Fannie Mae and Freddie Mac have confirmed that commissions for buyer agents will remain excluded from the limits on seller concessions. This means sellers can offer to pay buyer agent commissions without affecting the maximum allowable concessions under financing guidelines.
- But the big players say "wait a minute"
- Brokerage Objections: Various objections have been filed against the settlements involving major brokerages like Anywhere, RE/MAX, and Keller Williams. Notably, PulteGroup has raised concerns about the claims process and accessing settlement funds.
- See you in court
- HomeServices of America: The company faced mixed outcomes, failing to get the Supreme Court to dismiss a verdict related to arbitration issues, but managing to delay a judgment on damages.
- Restarting of Cases: Many cases that were on hold are resuming, including prominent lawsuits like Nosalek and Moehrl.
What FSBOs Should Know
- How does this impact your selling strategy?
- Offer Commissions: With commissions remaining excluded from seller concession limits, FSBO sellers can still offer to pay buyer agent commissions as an incentive without complicating financing.
- Dealing with agents: Proposed rule changes from the NAR settlement include removing the offer of compensation field from Multiple Listing Services (MLS) and requiring signed buyer agreements before showings. These changes aim to increase transparency and could influence buyer agent interactions. Let's not get in any sticky situations here, shall we?
- What's next?
- Settlement Finalization: Hearings to finalize settlements for major brokerages began May 9th.
- Implementation of New Rules: The proposed rule changes from the NAR deal are expected to take effect in July, though these dates may shift.
- DOJ's Continued Oversight
- Reopened Investigation: The Department of Justice (DOJ) has been allowed to reopen its investigation into potentially anticompetitive practices by the NAR, signaling potential further changes in the industry.
Practical Steps for FSBO Sellers
- Stay Informed
- Monitor Updates: Keep abreast of any new developments in the real estate commission landscape, as these can directly affect your selling strategy. Sign up for our newsletter or follow us on social media
- Understand Your Obligations
- Compliance with New Rules: Ensure that you comply with any new regulations regarding buyer agent commissions and seller concessions to avoid legal issues.
- Leverage Professional Advice
- Consult Professionals: Even as an FSBO seller, consider consulting with real estate professionals or legal experts to navigate the complexities of these changes effectively.
Want to get started selling your home now?
