Landmark $418M settlement shakes up real estate market with historical reforms – KRCR

The National Association of Realtors announced Friday a $418 million settlement which could lead to some of the biggest reforms in the US real estate market in a century.

So what changes? Buyers will be signing buyer-broker agreements before going and viewing a property. Listing agents will no longer be able to publish the commission on the multiple listing service.

Redding real-estate broker, Josh Barker, says this new change may lower fees.

So the expectation is that sellers will now have a better opportunity to negotiate the commissions they pay, and buyers also, will also be able to negotiate the commissions they pay… so the expectation is that services could significantly go down.

What’s pushing the change? Lawsuits on the east coast alleging real estate agents of collusion.

The lawsuit, filed in April 2019 by a group of home sellers in Missouri, argued the rule encouraged realtors to steer their clients away from homes with a lower commission and toward more expensive ones — where they could make a larger profit.

The settlement is to help compensate home sellers across the U.S over four years

What’s pushing the change? Lawsuits on the east coast alleging real estate agents of collusion. Justin Jones, the leader of Waterman Real Estate in Redding, talked about how California is now paying the price for something they have already been doing, because of this class action lawsuit nationally.

There was a lawsuit back east, where the listing agent didn’t disclose to the sellers how much they were offering to the buyers agent (cooperating broker), and in California, it’s always been disclosed so, now because of what happened back east, we are kind of paying the price for it.

Josh Barker Real Estate seems to be excited about this new change to the market, but some agents are unsure how this new change will impact the housing market.

“We really don’t know how it’s going to shake out I have concerns that there might be some unattended consequences if the buyers are gonna have to pay their agent” -Justin Jones

Jason Walter, a real estate agent and Youtuber in Sacramento believes harmful effects are possible with the potential changes, especially with first-time homebuyers.

This could be a huge out of pocket expense for homebuyers out there, and the biggest impacts for homebuyers, sadly, are people who are using minimum down payment… also our veterans they have a great loan program, VA loan, it’s 0% down payment, a lot of these folks who have minimum down payments don’t have the cash reserves in order to pay for a buyers agent…. so what do those homebuyers do?

Walter also believes the timing is not good, considering the current economic turmoil.

This is then worst timing right now because the people who will be most impacted by this will be cash strapped buyers and we already have a huge housing affordability issue nationwide, due to the fact the prices have increased nationwide by about 40%, on top of that, rates have more than doubled since 2021.

If this change gets passed by the courts, then it will go into effect by mid-July of this year.