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Summary of the most recent real estate news - big changes coming!

Here are some of the details that you've read about in the news recently.  This is definitely going to impact the way real estate is handled moving forward.

  • The National Association of Realtors (NAR) has agreed to settle lawsuits that have significantly impacted the real estate industry, with the settlement including both monetary compensation and substantial reforms.
  • NAR will pay $418 million in damages over four years and has agreed to enact several changes to how homes are bought and sold in the U.S.
  • A crucial part of the settlement includes NAR agreeing not to create rules that allow listing agents to determine compensation for buyer brokers, and offers of compensation will not be displayed in multiple listing services (MLS).
  • The settlement will affect NAR, its over 1 million members, all state and local Realtor organizations, all MLS owned by Realtor associations, and all brokerages with an NAR member as principal with a residential transaction volume in 2022 of $2 billion or less.
  • The settlement does not cover members affiliated with HomeServices of America for the duration of their affiliation.
  • NAR will create a new rule prohibiting offers of compensation from appearing in the MLS, effective mid-July. Offers of compensation can still occur off-MLS through negotiation.
  • MLS participants are required to work with buyers to enter into written buyer representation agreements before touring homes. Broker negotiations for pay can occur outside MLS through various methods.
  • The settlement aims to address accusations against NAR for overseeing practices that allegedly inflated commissions and maintained high commission rates.
  • The settlement is still subject to court approval and is expected to be scrutinized by the U.S. Department of Justice, which has previously called for reforms that would require buyers to negotiate broker compensation independently.
  • The proposal could end a wave of lawsuits filed against NAR and is seen as a step toward reforming industry practices to encourage more competition and potentially lower real estate commissions.

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