The impact of the court's decision on the NAR lawsuit on home buyers and sellers

A historic decision by a federal jury could change the way Americans buy and sell homes. Industry experts said that this week's legal verdict, which found that the powerful National Association of Realtors (NAR) and several major brokerage firms colluded to inflate home sale commissions, could ultimately lead to lower realtor commissions and, more importantly, reduced costs for buyers and sellers. According to a group of lawyers, the jury's decision is likely to result in greater transparency, which has long caused confusion and frustration for consumers regarding where their money goes in real estate transactions.

Almost 90% of American homes are bought and sold through realtors affiliated with the NAR. The organization, which is the largest trade association in the country, requires home sellers to offer an undisputed commission before listing homes in its database called the Multiple Listing Service (MLS), which feeds real estate websites like Zillow.

Participants in a recent case in Kansas City successfully argued that the NAR rule restricts competition and leads to higher prices. They claim that if it weren't for MLS, buyers would reimburse their agents on their own, just like sellers do. The first phenomenon on Tuesday could lead to the judge handling the case in Missouri issuing a ban on established commission rates and split commissions between buyers and sellers. Commissions for agents could cut 30% from the annual pool of $100 billion for 1.6 million realtors, estimated Keefe, Bruett, and Uds.

“The court injunction could 'break apart' the commission structure nationally by the beginning of 2024, eliminating the long-standing practice of setting and paying commissions to buyer agents,” analysts said.