508 viewsBy Serj Markarian, Licensed Real Estate Salesperson and Manhattan Market Expert
The National Association of Realtors (NAR) settlement has attracted significant media attention nationwide, prompting inquiries from clients. In essence, the proposed settlement agreement aims to resolve litigation stemming from claims that the real estate industry conspired to maintain high broker commissions. Key elements of the settlement include the release of liability for over a million NAR members and other parties, mandated changes to Multiple Listing Service (MLS) practices, and a payment of $418 million by the NAR. It's important to note that NAR denies any wrongdoing in this matter.
The impact of the settlement on New York City is anticipated to be minimal, if at all. New York agents operate under the Real Estate Board of New York (REBNY), distinct from the NAR. Earlier this year, REBNY proactively established its own regulations, possibly in anticipation of potential lawsuits following the NAR settlement. These regulations aim to enhance transparency, reinforce consumer confidence, and separate buy-side and sell-side commissions. Notably, one provision prohibits listing brokers from compensating buyer's agents, shifting the responsibility to sellers to directly pay them. Additionally, listing agreements will be required to clearly specify the seller's offer of compensation to buyer's agents.
For the time being, it appears unlikely that there will be any significant changes affecting New Yorkers. If anything, the settlement might create competitive pressure on commissions, potentially resulting in lower fees. However, this could also mean that clients will continue to work with experienced brokers, as the new regulations may prompt less knowledgeable brokers to leave the industry. Any decrease in commissions could potentially lead to a decline in listing prices. As is typical in the real estate world, we're accustomed to navigating uncertainties.
