6 May 16 - 22, 2024 dallasobserver.com DALLAS OBSERVER Classified | MusiC | dish | Culture | unfair Park | Contents Realty Check Real estate pros in North Texas face an uncertain future with questions hitting the market as fast as homes. By Jacob Vaughn F or years, while Jack worked in re- tail, he was looking for a career change, something more entrepre- neurial and flexible. So he got into real estate sales, with its potential to earn more money. It’s been a challenging job, but he’s loved it along the way. Now, however, he’s considering other options in light of a recent court settlement. Jack spoke to the Dallas Observer on the condition of anonymity because he’s still in the real estate industry. In March, the National Association of Re- altors (NAR) announced an agreement to end litigation of claims related to broker commissions brought on behalf of home sellers. The antitrust suit brought against NAR alleges the group artificially inflated commissions paid by sellers, which raised home prices. The settlement affects over one million NAR members across the coun- try who had residential transaction volumes of $2 billion or less in 2022. In the settlement, NAR denies any wrongdoing. Under the agreement, NAR is to pay the plaintiffs $418 million over about four years. The agreement awaits final ap- proval from the court. The settlement means a lot of things for the real estate industry. It could drop the commissions paid to real estate agents, put- ting more money in the pockets of people selling their homes. This could cause more people to list their houses for sale, poten- tially driving down prices overall. But there are worries. What happens to all the real es- tate agents who might not earn as much money? They could decide to leave the in- dustry. Additionally, some buyers could get stuck covering the cost of their own agents or attempt to buy a home without one. That could be a challenging prospect for first- time homebuyers attempting to navigate an already complicated transaction. No one with NAR was willing to com- ment directly because the settlement is still being worked out, but a spokesperson sent this statement: “We are pleased that the court has preliminarily approved the settle- ment because it is in the best interests of all parties and class members. It has always been NAR’s goal to resolve this litigation in a way that preserves consumer choice and protects our members to the greatest extent possible. This proposed settlement achieves both of those goals and provides a path for us to move forward and continue our work to preserve, protect, and advance the right to real property for all.” According to CBS News, 9 in 10 home sales are handled by NAR-affiliated real es- tate agents. The organization is the largest trade association in the country. Without the settlement, which could get a final approval hearing in November, people selling their homes generally pay a 6% agents’ fee that’s usually split between the buyer’s and seller’s agents. Late last year, the median sale price for a home was about $417,700 in the U.S. A 6% commis- sion on that amount would be a little over $25,000, to be split between the buyer’s and seller’s agents. Today, a seller’s agent advertises the buyer agent’s commission on something called the multiple listing service, or MLS, a detailed index of homes on the market that’s where most home sales originate. On the MLS, the seller’s agent basically says, “I’m going to offer the buyer agent 3% commis- sion on any homes I’m selling.” This guaran- tees the buyer’s agent gets paid at the end of the day. That’s not how it’s going to work anymore. Under the settlement, sellers’ agents can’t advertise the buyer agent’s commis- sion on the MLS. This should remove incen- tives from a buyer’s agent to steer clients away from home listings with lower or no commissions. This could slash the fees split between the seller’s agent and the buyer’s agent by up to 30%, according to The New York Times. Jack said the settlement largely revolves around decoupling the buyer’s and seller’s agents’ commission. Without the | UNFAIR PARK | Photo Illustration by Sarah Schumacher/Getty Images >> p8
