The Real Estate Game Has Changed!
Don't Miss Out on What This Means for You
Will Commissions Go Away?
What Will Change?
How Does the Settlement Effect Me?
What is This All About?
A lawsuit against the National Association of Realtors (NAR) is in the settlement phase and preliminary terms suggested to take effect June 15th, 2024 include no longer requiring sellers to pay commission of the buyers agent(s).
How Were Real Estate Agents Paid to Date?
Historically, Agents on both sides of the transaction (seller and buyer) were paid out of the proceeds of the sale (more explanation below). Typically this has been a commission expressed as a percentage of the sale. The sellers agent (also called the listing agent) and the seller negotiate a listing commission – most often 6%. Then the seller agent would disclose how much of that commission the listing agent would then share with the buyers agent.
Why the Lawsuit?
In our humble opinion, and ours alone:
The National Association of Realtors (NAR) made itself ripe for a lawsuit by how it dominated and controlled the housing sales marketplace on and offline. Large Tech players such as Amazon, Google, Zillow, Realtor.com, Redfin were, and are, hungry to compete in providing online marketplaces for home listings. Yet they were hampered by the insurmountable entry barrier that NAR facilitated in and around the Multiple Listing Service (MLS) online environment.
Lawsuits against NAR serve to “break the Union” and its control, weakening its value proposition to its dues paying members and thereby potentially opening the doors to new marketplaces owned and run by other beneficiaries. There is always money involved. With Hundreds of Millions of Dollars paid in this case, there most certainly was and is.
What Happened in This Suit?
Plaintiffs (Sellers of Homes in Missouri) claimed that they were forced to pay the commissions of agents representing buyers, which not only harmed them by having to pay for agents negotiating against their best interests, but also in violation of the Sherman Anti-Trust Act.
During the trial, NAR changed its position that a Seller MUST provide some commission to a buyer agent, to a Seller is NOT REQUIRED to provide a commission to the Buyer Agent. The case continued despite this change.
The Court ruled that NAR had violated that Act. NAR proposed a settlement that is under consideration to change several aspects of its policy and procedures, explained further below in chart and press release formats.
Current Settlement Offer
NAR has offered a settlement agreement to take effect on July 15th, the complete terms are referenced by links below – and we can send to you via email if you complete the form below.
The top points of this settlement are:
1) All Buyers must sign a buyer agreement with any real estate agent before being shown any property. This is to increase transparency and clearly articulate the retainer fee and commission (both were and continue to be negotiable and optional) to be paid to buyers agent.
2) The commission to be paid to buyer will no longer be displayed within the MLS system, yet can still be offered by the seller. There are many discussions on where sellers desirous of paying buyer agent commissions will post those terms.
3) Increased consumer awareness will drive Agents to better demonstrate their value. On the purchasing side, ensuring the best value for their clients, and on the listing side, articulating the pros and cons of a variety of new strategies while maximizing exposure to the market and achieving the highest net number for the seller, even if (and it’s very likely) that means offering a buyer’s commission.
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Top Misperceptions
- Commissions will go away or be greatly reduced
- As a Seller, I’ll save money and pay less in commissions
- As a Buyer, I’ll save money using the sellers agent
Change Is Good: What is Changing?
Agreement Required
Buyer Commission
* There is popular debate on where commissions are paid from.
Our POV is that without a sale, there are no commissions for either seller or buyer agents.
Whether those payments are within the sale or surrounding the sale, effectively they are paid out of “proceeds of the sale”.
This is a true “chicken and egg” situation as often the buyer will state that agent commissions are being paid by the seller out of the sale price; and many times, the seller will state that the commissions are being paid by the buyer out of the offer price.
This causes confusion and we find it easiest to simply state that commissions are paid out of the transaction, aka “proceeds of the sale”.
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Clarifications with
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“There will be no more 6% Commissions”
- Not quite. In the past and recently, there have always been discount brokers and agents and websites who will work for free or very little.
The same will be true going forward. - Many Real Estate Agents have earned 7%, 8% and more in the past and will continue to earn that in the future. The best add retainer fees on top of the commission.
Because clients know that they, and we, deliver high value. - Will there be pressure from consumers to lower commissions? You bet.
- Will some agents lower commissions? Of course. And it is predicted that 25% will leave the business as they don’t have the skills to represent their value and be paid.
- Your driveway or sidewalk wise neighbors like to talk about free or lowest cost.
How does that work for anyone in terms of quality of service and products? - Do you want the cheapest Doctor, the least expensive Attorney or the lowest priced Real Estate Agent? That’s up to you.
“I won’t have to pay a commission to sell or to buy”
- Curious and Begs the Question: How will Real Estate Agents be paid? Unless someone is lining up to pay them salaries, it will remain a full commission occupation. Paid by Sellers and Buyers, one way or another.
“I will just go Directly to the Seller or the Sellers Agent and I’ll Save $$”
- With this wisdom, you’d never need an Attorney since you can just use the same one as the opposing party or the partner you are divorcing.
If all your past realtors have done is
unlock doors for you and
show you what you can find
for yourself on the internet
let us show you what
true professionals can do.
Winn Team Embraces Settlement
CLEARWATER, FLORIDA, UNITED STATES, March 25, 2024
— In the midst of significant shifts within the real estate landscape, Keith & Yamil Winn of The Winn Team at Realty One Group Beyond are voicing their support for the National Association of Realtors’ (NAR) proposed resolution to class action lawsuits, specifically highlighting the Sitzer / Burnett cases (U.S. v. National Association of Realtors, Case No. 05 C 5140). Announced on March 15, 2024, this proposed agreement is a crucial step toward improving transparency and understanding around brokerage fees for consumers, a move that Keith & Yamil Winn believe will benefit the whole industry.
As part of the proposed settlement, the NAR intends to enforce rules that bar listing agents from compensating buyer’s brokers via multiple listing services. Another significant change is that MLS participant buyer agents will be required to sign buyer representation agreements before showcasing homes. This measure aims to ensure that buyers are well-informed about the services being offered and the fees involved—practices previously endorsed by NAR but soon to become compulsory.
“We staunchly advocate for transparency and have always made efforts to clearly communicate our fee structure to our clients,” remarked Keith & Yamil Winn. “These forthcoming adjustments resonate with our team’s values and practices, and we view them not as a limitation but as an opportunity to further simplify the buying and selling process for our clientele.”
Based in Clearwater, Florida, Keith & Yamil Winn have established themselves as leading figures in the real estate market. The commitment of The Winn Team at Realty One Group Beyond to provide superior service and ensure client satisfaction remains strong.
As the real estate sector awaits judicial approval of the settlement terms, The Winn Team at Realty One Group Beyond, Clearwater, Florida, is prepared to adapt and continue delivering outstanding real estate services that address the dynamic needs of homebuyers and sellers.
For more information, contact: The Winn Team at Realty One Group Beyond – 2356 Countryside Blvd. Suite 222, Clearwater, Florida 33763 / 727.353.6636 / winn@winnteamrealtors.com
Keith & Yamil Winn
Extras for Experts
We are not lawyers and can not provide legal advice or summaries. All we can do is apply our wisdom and experience and express our point of view.
If you’d like to learn more and form your own opinions, here are some resources:
The Florida Realtors.org summary Click Here
The views, information, and opinions expressed in this press release are solely those of Keith and Yamil Winn and do not necessarily represent those of Realty ONE Group, Realty ONE Group Beyond, or their affiliates. Neither Realty ONE Group, Realty ONE Group Beyond, nor any of their affiliates is responsible for the accuracy any information contained in the press release.