It’s been a wild ride for the National Association of Realtors over the past year. But things could be set to finally calm down for the embattled trade group.
On Friday, NAR agreed to settle antitrust lawsuits over broker commissions, agreeing to pay a staggering $418 million in damages over four years. Along with the payment, NAR also committed to policy changes to address concerns raised by the lawsuits.
The organization will prohibit listing brokers from offering compensation on the MLS. Additionally, it mandates that buyers' brokers disclose both their anticipated commission and the services they offer in written agreements.
Nykia Wright, NAR's interim CEO, declared it a difficult but necessary compromise to safeguard the livelihoods of members and their businesses.
Perhaps most important, the settlement — should it be approved by the judge overseeing the case — would mark a potential turning point for NAR, which has become something of a pariah in recent years.
Questions around the trade group’s effectiveness have become increasingly loud in recent years, with many claiming that it had lost sight of its vision for the residential industry. The organization’s reputation also took a hard hit last year thanks to allegations of sexual misconduct by then-CEO Kenny Parcell.
Membership has fallen below 1.5 million, and the bleeding could continue. It certainly has for residential brokerages. Anywhere, Compass, Elliman, Redfin and Zillow all saw their stock prices plummet following the announcement of the settlement.
In the meantime, some experts have already begun to predict a sea change in the housing market. Commission costs, long built into the home-selling process, are primed to decrease.
