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My understanding of the NAR case is that the commission field in the MLS database is removed. So, the seller effectively can negotiate the terms of both seller and buyer broker commission.

Now, this doesn't prevent a seller to call up an agent off the MLS and make a deal.

What I am puzzled: who is the intended beneficiary of this NAR settlement?

My guess is that the settlement tries to break the tacit and traditional 6% (3 for buyer agent, 3 for seller agent) rule in the broker industry and potentially making it lower thus the list price lower since sellers baeke in these commissions into their list prices.

But couldn't just a rich seller call up both sides of the agents and offer something like 8% and this empowers those who have more financial resources (e.g., larger, bigger, more expensive homeowners)?

This is why I am trying to understand who exactly is intended to benefit from this settlement but who will eventually benefit from the settlement.

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  • Isn't the point of any settlement supposed to be that it's a compromise between the parties, reducing uncertainty and cost of litigation? If so, the benefit is to the parties involved. I'm not sure what you are asking beyond that.
    – keshlam
    Commented Aug 6 at 15:47

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The beneficiaries of the NAR settlement are the members of the class, but in reality it is usually very small amounts to anyone other than the main plaintiff and the attorneys.

In addition the settlement includes provisions designed to prevent the harm from happening again, and these are focused on the conditions of listing on MLS which until now included the buyers commission conditions included in the published listing (usually 3% to the buyer's agent paid by the seller). The new conditions are that the buyer's agent will work with the buyer on their compensation and the seller is not required to offer buyers' agents commission.

Now, this doesn't prevent a seller to call up an agent off the MLS and make a deal.

No, it doesn't, and sellers could have arranged private deals before. In reality, unless you have a potential buyer prearranged, MLS is a must and not listing on MLS will lead to severely reduced visibility of your listing.

But couldn't just a rich seller call up both sides of the agents and offer something like 8% and this empowers those who have more financial resources (e.g., larger, bigger, more expensive homeowners)?

Yes, they could. There's a big difference between choosing to offer buyer's agent commission and being forced to by the monopolistic provider.

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  • Thanks for the reply - I don't think I was clear. I was doing the economic impact analysis, so when I say "beneficiary", I meant who are the intended beneficiaries of the future economic impact dervied from the NAR settlement. From the surface, a seller no longer is obliged to pay a buyer agent's compensation. So, it seems to put less strain on seller. Since the broker fee is usually baked into the list price, the secondary "intended" effect is to reduce the general housing price level. Would you agree?
    – Frank Swanton
    Commented Aug 6 at 22:47
  • @FrankSwanton we can speculate about the future impact all we want. The class action was brought on behalf of sellers, and they're the ones who agreed to the settlement.
    – littleadv
    Commented Aug 6 at 22:50
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But couldn't just a rich seller call up both sides of the agents

But how do they know who the buyers agent will be? Everybody that is considering making an offer could have their own agent. There will already be a contract between potential buyers and their agents.

Are you suggesting they will try to bribe the buyers agents in violation of their existing contract? That doesn't sound like a good thing to do.

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  • Thanks for the response - so in your answser, who are the beneficiaries?
    – Frank Swanton
    Commented Aug 6 at 14:21

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