National Association of Realtors (NAR) Lawsuits
Positive impact on SnapFlatFee.com™, our business model, and our customers
You may have heard about the lawsuit involving the National Association of Realtors and its potential impact on the real estate industry, particularly on the traditional brokerage business model. Here, I’ll explain in simple terms how this will affect commission structures, focusing on the advantages SnapFlatFee.com™ offers over traditional brokerages.
For years, the real estate industry has operated on a standard model:
Listing Agents charge sellers a typical 5 or 6% commission. Up to now, Listing Agents have been required to offer a portion of that commission (usually half) to all other Realtors, through the Multiple Listing Service (MLS). This ensured that when a Buyer’s Agent found a property for their client (the Buyer), they’d be compensated by the seller via the Listing Agent.
However, concerns arose among the public regarding this structure, leading to legal action against the National Association of Realtors (NAR) and its affiliates. Many believed this system artificially inflated prices for consumers, prompting the lawsuit and the involvement of the U.S. Department of Justice (DOJ).
Following the trial, the jury issued a verdict against the National Association of Realtors (NAR). Recently, NAR submitted a proposed settlement agreement. If sanctioned, this agreement will institute alterations in the manner in which commissions for Buyer’s agents are both offered and remunerated.
Under the new agreement, Listing Agents will no longer be allowed to offer a commission to Buyer’s Agents through the MLS. They can still offer compensation but onlyu through direct negotiation.