Realtor Group Slashes Commissions, Prompts Major Industry Shift

The National Association of Realtors (NAR) has reached a settlement in an antitrust lawsuit that will see the organization pay $418 million in damages and dismantle longstanding rules on commissions. The decision comes in response to multiple lawsuits from home sellers who argued that NAR's rules resulted in unfairly high fees. As part of the settlement, the standard 5-to-6 percent commission traditionally charged in home purchase transactions will no longer be enforced by the NAR, potentially lowering the cost of buying and selling homes.

This shift could fundamentally alter the real estate business model, akin to changes seen in the travel industry with the advent of online booking platforms. It opens the door to a more competitive market for Realtor services and may lead to more innovative and cost-effective methods of buying and selling property. The settlement is subject to approval by a federal court and comes at a time when the NAR, which boasts over $1 billion in assets, is under investigation by the Department of Justice. If approved, the settlement could herald significant changes in the housing market, affecting how Americans transact real estate and how Realtors operate within the industry.