A New York and Connecticut practicing realtor is sounding the alarm over “misinformation” involving a landmark settlement that could impact real estate practices and commissions as we know them.
“I know I speak for a lot of real estate professionals when I say that we’re upset with a lot of the misinformation that is getting circulated about the proposed settlement,” realtor Brittany Sandarciero told Fox News Digital.
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“What these proposed changes will do is clean up a lot of real estate agents who don’t run their business like an actual business or keep up with new rules and regulations. Proving your worth and showing your value as a realtor will be what keeps those true professionals in the field, while others will leave the profession from lack of worth and lack of business.”
The National Association of Realtors (NAR), reached a settlement last week that will alter policies regarding broker commissions. The agreement comes due to a series of lawsuits nationwide which claim the policies have allowed for inflated fees and even violated antitrust laws.
“As it’s always been a free market, buyers and sellers may choose to hire a real estate professional to represent them, or they may not. No one is forcing anyone to work with a realtor or forcing them into an agreement they aren’t aware of,” Sandarciero said.
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NAR, which hasn’t admitted any wrongdoing, will pay $418 million over four years to compensate home sellers. Under the terms of the settlement, which is still subject to court approval, the listing databases governed by the NAR – also known as multiple listing services (MLS) – are no longer allowed to offer a commission to a buyers’ agent.
An MLS is a database run by a cooperative of real estate agents who can share listings with agents at different brokerages.
“Paying a commission is not going away,” Sandarciero said. “Just like in any profession, there are fees associated with working with a professional, whether an attorney, consultant, financial advisor, etc. The cooperating commission amount, if being offered, cannot be advertised on the multiple listing service (MLS), proposed for this July. There will end up being different places where it can be determined how much commission is being offered out to a cooperating buyers’ agent. The amounts may vary, and buyers will either have it negotiated along with the price and then some come out of pocket.”
“Buyers were always paying the commission one way or another through the purchase price. So, ultimately, nothing is really changing in this aspect,” she added.
NAR said in a statement to FOX Business that the group does not set commissions and that they are negotiable.
“The rule that has been the subject of litigation requires only that listing brokers communicate an offer of compensation,” the NAR said, noting that “that offer can be any amount, including zero. And other rules throughout the MLS Handbook and NAR policy expressly prohibit MLSs, associations, and brokers from setting or suggesting any such amount that should be included in that field.”
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Some critics, however, are concerned the agreement is another “hit” to homeownership.
“Homeownership, in my opinion, just got hit again because of this lawsuit,” “Mansion Global” host Katrina Campins said on “Mornings with Maria” Friday.
“Now what’s going to happen is, basically, buyers are going to go directly to the listing agent, and think about all the misrepresentation that’s going to occur at that point in time, and then think about all of the kickbacks that are going to be given, all the bonuses. I also think that listing agents are going to actually use buyers against each other to… get an increase in price so that the seller benefits. So I think this is extremely unfortunate.”
Another critic warned the lawsuit marked the “Amazonification” of the U.S. real estate industry.
“This just is not a good look for the industry. And it’s not good for realtors because, essentially, real estate agents are the ones who are going to get hurt by this,” DFW housing and macroeconomics analyst Amy Nixon said on “Making Money” Thursday.
“The biggest implication of this judgment is it is moving us forward towards what I’ve always considered to be the ‘Amazonification’ of U.S. residential housing. We’re going to make transaction costs lower, but what that does is make it easier for people to buy at scale. And guess who buys at scale? Not families, investors and institutions.”
The NAR settlement has stirred up confusion and frustration, and as while waiting for court approval, the housing market remains a tough industry for buyers and sellers alike.
FOX Business’ Daniella Genovese contributed to this report.
