The NAR settlement changed everything — what buyers and sellers need to know
The NAR settlement rewrote the rules for how real estate commissions work. If you're buying or selling a home, this directly affects your money — and most agents still can't explain it clearly. I break down what actually changed, what it means for you at the closing table, and why transparency in real estate was long overdue.
Transcript
I know you guys heard the news today, NAR just settled to pay out $418 million. As a member of the National Association of Realtors, myself, I kind of find that hard to believe because the code of ethics that NAR sets are pretty strict. Like I vividly remember sitting through some boring NAR video trainings about price fixing and how they explicitly discouraged it. So in essence, there never has been a standard commission because coercion to create a standard commission was highly frowned upon.
So to give a better understanding about this, I think it's necessary to have the proper context. Back in the day, the MLS used to be a book like this, right? So you want to buy a house, you need help finding a house that's listed. You will go into a real estate office.
The real estate agent will have this book with a bunch of listings and you look through this book and if you like the house that you see in this book, the agent would tear the page out and then you go see the house. Now over the years, some third party real estate websites will also NAR members I'm not allowed to mention because code of ethics, we're not supposed to talk bad about our members. They exploited the MLS and put it online for their own profit. Newsflash, those third party websites aren't really real estate websites.
They just sell consumer information to realtors, but I'm just leave that one alone. And my personal opinion, I believe a lot of this is fueled by greed. Yes, by NAR, but also by sellers themselves. Naturally, as a seller, you want to sell your house for the most money as possible and with the least amount of expenses as possible.
So who this hurts the worst are buyers. Buyers will end up putting themselves at a disadvantage in an effort to try to get the house for the lowest price possible to not use the assistance of an industry professional that understands, uh, major defects, um, hazardous defects and other elements that could potentially hurt you financially and your health is not the best idea. That is exactly why the commission structure is the way it is now. Jeez.
If buyers are left to pay their commission themselves, in addition to buying a house, they will not pay commissions and this would lead to a plethora of lawsuits. So ultimately who this hurts are the real estate agents themselves. Most notably, you know, those single moms who are trying to make a better life for themselves and their kids. Um, but they're having a hard time because one, they have to pay all of these fees that they can't perform any normal real estate functions without them.
And two, because of sellers reducing what they make per deal, you break this down to you. So you get your real estate license, you pay all the necessary fees to be licensed. You still can't write contracts. You can't even do showings without being a member of NAR.
So in my opinion, the real victims are the NAR members themselves. But what do I know? I'm just a real estate agent. Let me know what your thoughts are.
Machine-generated from the video audio.
