Motley Fool Money NAR Settlement: Real Estate’s Potential Winners And Losers
Mar 26, 2024
Nick Sciple, an investment analyst specializing in real estate, and Robert Brokamp, a financial planning expert, discuss a landmark settlement by the National Association of Realtors that could reshape home sales. They delve into how this change might affect realtors, boost competition, and benefit companies like CoStar due to its data-led approach. Additionally, Brokamp emphasizes the importance of financial organization for families, sharing strategies to prepare loved ones for unexpected events.
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Pre-Settlement Commission Structure
- Traditionally, home sellers paid a 6% commission, split between buyer's and seller's agents.
- Buyers didn't directly pay their agents, as the fee was included in the home price.
Impact on Buyer Agent Fees
- The settlement changes how buyer agent fees work, requiring upfront negotiation and signed agreements with buyers before home tours.
- This increases transparency and shifts the fee burden directly onto buyers, potentially impacting affordability.
Realtor Industry Shake-Up
- The real estate agent industry, already tight with 1.5 million members for 4 million home sales, faces increased competition.
- This could lead to fee compression and agents leaving the business, particularly those who sell few homes.