HARRISBURG, Pa. (WHTM) — No one knows what exactly the business of buying and selling homes will look like following Friday’s settlement between the National Association of Realtors and groups of home sellers, who accused agents of colluding to keep commissions high.
But nearly everyone agrees: It will change.
In Pennsylvania, “there’s likely to be a lot more direct client and consumer negotiation with their brokers and with their agents — so a lot more, maybe, customizing of the fees and services that happen in particular transactions,” said Hank Lerner, chief legal officer for the Pennsylvania Association of Realtors (PAR).
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On the other hand, Lerner said the changes might be somewhat less dramatic in Pennsylvania than some states, because of provisions dating to 1999 that already allowed buyers to sign agreements with agents, a limited form of what experts say is likely to result from Friday’s settlement.
“So our conversations with my colleagues across the country suggest that we’re in a very good position,” Lerner said. “We’re going to have to make some changes, we know, but we think we’re in a good position to sort of tweak what we have as opposed to starting from scratch.”
Lerner said PAR hasn’t yet learned details of the agreement, so he could only speak in general terms about what might change. But he said certain things are clear.
“The current common practice of listing brokers offering compensation to buyer brokers through the multiple listing service is probably no longer going to be allowed,” Lerner said. “That seems to be the main announcement here.”
The NAR also agreed to pay $418 million in compensation to sellers who had sued.
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Lawyers for the sellers and other consumer advocates celebrated what they viewed as an outcome likely to result in lower sales transaction costs, based on the experiences of countries with structures more similar to what could result in the U.S. from the settlement.
In the U.S., for most of the past century, home sellers have agreed in advance with their listing agents on a total sales commission — typically 6% — and those agents have offered through the multiple listing service (MLS) used by nearly all agents to share that commission (typically half of it, or 3%) with an agent whose buyer ultimately buys the home.
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