How $418 million real estate settlement could affect you

EAST PROVIDENCE, R.I. (WPRI) — If you’ve sold a home recently, you may be able to file a claim after the National Association of Realtors (NAR) agreed to a $418 million settlement earlier this year.

According to the lawyers behind the settlement, it resolves claims against Anywhere Real Estate, RE/MAX LLC, and Keller Williams Realty, Inc.

Home sellers who filed the lawsuit alleged that they were paying inflated commissions to real estate brokers or agents.

Real estate professionals working with a buyer and seller typically split a commission on the home around 5% or 6%. The lawsuit claimed the sellers were not told those percentages were negotiable.

When announcing the settlement, NAR said, “two critical achievements of this resolution are the release of most NAR members and many industry stakeholders from liability in these matters and the fact that cooperative compensation remains a choice for consumers when buying or selling a home.”

Jennifer Bove, a broker owner at Keller Williams Coastal, oversees about 245 agents. Both Bove and her agents are NAR members. She thinks the settlement can bring about positive change.

“What’s happening is there’s going to be a lot more transparency in our world to be able to present to consumers and clients,” she explained.

As part of the settlement, NAR members will need to have written agreements with their clients. NAR says it has been encouraging its members to use buyer brokerage agreements for years.

Bove agreed, saying, “now, it’s being mandated that we have that discussion ahead of time, and I love that fact. I’ve been practicing that way since I got my license.”

There’s been speculation that the settlement will cause home prices to go down, since the perception is that less money will now be spent on commissions, but Bove disagrees.

“The reality is that’s supply and demand,” Bove said. “The market is going to happen the way supply and demand goes, and if you know anything about the market, we are still in a low-inventory market.”

Bove does believe the new NAR rules may lead to some members leaving the industry.

“What I think might come out of this, there might be agents that drop their license because there is a little more involved to explain, to do, to handle, and to really provide value,” she said.

Bove also fears that more people will try to buy or sell their homes without professional help.

“Being able to have someone on your behalf negotiating and really putting your best foot forward and protecting you during that whole process is important, and it’s always going to be an important piece,” she said.

NAR says the changes are expected to go into effect in mid-July.

You can find out whether you are eligible for compensation here.