A recent federal case was decided last year that would significantly impact the home-buying process in America. These changes start around mid-July.
In October 2023, an eight-person federal jury in Missouri found that the National Association of Realtors (NAR) and other national real estate brokerages were involved in a conspiracy to increase real estate agent commissions. These agencies promoted requiring home sellers to pay the buyer’s agent’s fees as standard home closing costs. The jury ruled that this practice was wrongful, and the agencies were ordered to pay over a billion dollars in damages.
Following this, a settlement in March 2024 was reached concerning new rules on handling agent commissions. In the past, sellers of homes had to pay their agent’s fee and the buyer’s agent’s commission. In Ohio, the combined cost of the buyer’s and seller’s agent’s fees comes to an average of 5.99% of the home’s price. Using these figures, a seller who just sold a $300,000.00 home would be responsible for a $17,970 combined commission.
As a result of the settlement, the seller is no longer required to bear the buyer’s side’s costs. Real estate agencies will now have to follow certain rules concerning commissions, including a more cooperative compensation structure. This cooperative compensation structure means that sellers’ agents will offer to compensate the buyer’s agent when the homes are listed on the Multiple Listing Service. Sellers are no longer required to pay such fees, which will likely reduce closing costs. These changes affect virtually all licensed real estate agents.
These new guidelines will alter the fees associated with closing transactions. These new federal regulations aim to monitor real estate transactions more closely to ensure transactional fees are reduced. Sellers will likely see a decrease in costs associated with selling their homes. Buyers will have the opportunity to negotiate fees with their agents. Real estate agents must be aware of these new rules to ensure they act in accordance with the latest guidelines.
Whether you are buying or selling a home and need legal assistance in navigating this process, or you are a real estate broker who wants to know how to comply with these changes, as mentioned above, we are here to help. The real estate attorneys at Pickrel, Schaeffer & Ebeling can be reached at (937) 223-1130.
