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Antitrust Verdict to Slash Real Estate Commissions by 30%, Experts Predict
The recent $1.8 billion verdict against the National Association of Realtors and major residential brokerages has sent shockwaves through the real estate industry. A federal jury found that these entities had artificially inflated commissions, leading to a violation of federal antitrust law by compelling home sellers to pay the buyer’s broker.
This landmark decision could prompt a substantial shift in the way Americans pay real estate agents. According to industry analyst Ryan Tomasello, the $100 billion spent annually on real estate commissions might see a drastic 30% reduction due to potential changes in the commission structure.
While the NAR plans to appeal the verdict, the implications of this ruling could be significant. Even if the legal process takes years, the verdict might catalyze alterations in the practices of real estate brokerages. Some major players involved in the case, including RE/MAX and Anywhere Real Estate, have settled, signaling potential changes in their operations.
However, other firms, like Keller Williams Realty and HomeServices of America, plan to appeal. They anticipate challenges for buyers and sellers in an already tough real estate market if the verdict stands.
Amidst this legal shake-up, the real estate industry might see the emergence of new business models. For years, startups such as REX have attempted to revolutionize agent payment structures without success. The cofounder of REX, Jack Ryan, believes this ruling will serve as a catalyst, potentially breaking the existing market “cartel.”
This verdict not only signals a potential decrease in real estate commissions but also holds the promise of transforming how real estate transactions are conducted. As the legal battle continues, the industry awaits potential changes that could reshape how real estate agents are compensated.