Back in March 2024, AyAMi Group released its view on the NAR's pending real estate commissions class action lawsuit settlement. Now that few more details outlined below are clearer, our position has not changed - sellers will continue to offer compensation to buyer's agents and impact on commission fees will be minimal, if any. - Effective date of practice changes: August 17, 2024 - Offers of compensation to buyer's agents will no longer be posted on MLS but can continue to be offered and shared via other non-MLS mediums such as broker-to-broker agreements, other types of written agreements, websites, brochures, posters, etc. - Sellers and sellers' agents or listing agents will continue to be allowed to offer compensation to buyer's agents via non-MLS mediums (as mentioned above) - Industry's approach is to continue to encourage sellers to offer compensation to buyer's agents as it will ultimately attract more buyers, drive higher demand, and drive higher prices. Per the industry chatter, this will continue to result in higher net purchase prices to sellers. - Some brokerages have elected to prohibit their listing agents from paying buyer's agents but they are still allowed to encourage sellers to offer the same compensation as a concession at closing #realestatetrends #homebuying #homeselling #narlawsuit
"Will the Proposed NAR Commission Lawsuit Settlement Truly Impact the Industry?" - Snapshot of AyAMi's view is below and for those more curious, our full article is attached. The real estate community is abuzz with news of the National Association of Realtors' (NAR) settlement proposal. Among the headlines is the potential reduction of the 5-6% real estate commission fees, a move that has sparked differing opinions among brokers and agents. As an industry practice, sellers’ agents typically post their offers of compensation for buyers’ agents on the Multiple Listing Service (MLS) platforms. In the settlement plan, NAR proposed to end this industry practice in July 2024. This sounds like a complete end to the high-commission fees. Not so fast. Even if the court approves the settlement proposal, the industry professionals believe the high commissions will not go away anytime soon. Big issue not being addressed in the settlement The settlement assumes that the main driver behind high commission fees is seller’s agents making offers of compensations on the MLS platforms to buyer’s agents. While MLS platforms are an easy medium for such offers, even if the court approves this settlement, brokerages and agents can still offer similar compensations outside of MLS. Plausible way for this practice to vanish is to allow buyers an option to represent themselves or to pay for their agent’s services directly. What inflates the buyer’s agent’s commission? The landscape of the real estate market is saturated with agents, a phenomenon driven by several key factors. The predominant model in the industry operates on a contractor basis, with agents compensated solely through sales commissions. This setup, coupled with minimal barriers to entry – requiring a GED, short course, and exam – has led to a proliferation of agents; a large pool of talent ready to pay fees to NAR and the traditional brokerages. Revolutionary Brokerages Leading the Charge for Change Acknowledging the need for transformation within the real estate sector, it's crucial to highlight brokerages pioneering alternative models to address systemic challenges. Among these trailblazers are: AyAMi Group (Connecticut), Yoreevo (NYC), Redfin, Nuhom (Boston), Bespoke Real Estate (Long Island, NY & Miami), and Justo Real Estate Brokerage (Toronto) just to name a few. These brokerages: (1) offer incentives to buyers such as commission rebates, lower commission fees for sellers, and flat fee programs, (2) pay salaries to their agents, and (3) reorganize the agent’s model, thereby reducing agent saturation in the market. Their collective vision is clear: to revolutionize residential real estate by offering competitive pricing and superior service quality across diverse markets. From serving entry-level homes to luxury properties in prestigious locations, these disruptors strive to redefine industry standards and empower consumers. Author: Mateusz Cieslak #realestate #homebuyers