The 6% commission, a standard in home purchase transactions, is no more.
In a sweeping move expected to reduce the cost of buying and selling a home, the National Association of Realtors announced Friday a settlement with groups of homesellers, agreeing to end landmark antitrust lawsuits by paying $418 million in damages and eliminating rules on commissions.
The NAR, which represents more than 1 million Realtors, also agreed to put in place a set of new rules. One prevents sellers’ brokers from setting buyers’ agents’ compensation, which critics say led brokers to push more expensive properties on customers. Another ends requirements that brokers subscribe to multiple listing services — many of which are owned by NAR subsidiaries — where homes are given a wide viewing in a local market. Another new rule will require buyers’ brokers to enter into written agreements with their buyers.
The agreement effectively will destroy the current homebuying and selling business model, in which sellers pay both their broker and a buyer’s broker, which critics say have driven housing prices artificially higher.
I am always baffled by “the shortage of home”. Population growth is pretty slow. And the news claims more young adults are living with thier parents. So where are all the homes going?
The homes didn’t go anywhere. They don’t exist. Developers basically stopped building enough homes in 2008. Since then the population growth has vastly outpaced the number of homes being built. Now we’re years away from having enough housing because it takes time to catch up building them. Unfortunately prices are not going to significantly drop any time soon.