US: The 6% Commission On Buying Or Selling A Home Is Gone!

The standard 6% commission in home purchase transactions is now gone.

The National Association of Realtors announced Friday a settlement with groups of home sellers. The settlement agrees to end the landmark antitrust lawsuits by $418 million in damages and eliminate rules on commissions.

More than a million realtors are part of the National Association of Realtors (NAR) and there is a new set of rules coming.

The first rule prohibits agents’ compensation from being included on listings placed on multiple listing services. Earlier it allegedly led brokers to push more expensive properties on customers.

Another rule ends requirements that brokers subscribe to multiple listing services.

And, another new rule requires buyers’ brokers to enter into written agreements with their buyers.

These new rules and NAR’s new agreement are likely to destroy the current home buying and selling business model. The current model is pushing the house prices artificially higher because the seller has to pay their broker and a buyer’s broker.

The new agreement is expected to pull down the real estate commissions by 25% to 50%.

Meanwhile, Homebuilder stocks went upon hearing the news. Lennar shares gained 2.6% and PulteGroup shares added 1.1%, Toll Brothers shares added 1%.