With the Pending NAR Suit Settlement, How Much Longer Will Jack Schoberg’s Long-Standing California Real Estate Rebates Be Available For Buyers?
A settlement was reached in March 2024 in the string of recent class action antitrust lawsuits involving residential real estate sellers and the National Association of Realtors. With significant changes approved and set to take effect on August 17th, 2024, there is some uncertainty within the real estate industry. To examine the question of how much longer Jack Schoberg and others will continue to offer real estate rebates, let’s first quickly review the NAR antitrust lawsuit settlement details.
The following points summarize major changes as a result of the NAR settlement:
- No More Compensation on the MLS: The Multiple Listing Service (MLS) will no longer show offers of compensation for buyer’s agents. This ends the long-standing practice of listing brokers sharing their commission with buyer’s agents through the MLS as a cooperation.
- Written Agreements Required: Buyer’s agents must now have written agreements outlining their services and client compensation. This change aims to clarify costs for homebuyers and ensure they understand what they are paying their agent.
- Negotiation of Compensation: Although the MLS won’t display compensation offers, home sellers can still negotiate directly with buyer’s agents to offer compensation. However, sellers might be less willing to make these offers in a competitive market.
- Adjusting Business Models: Buyer’s agents must adapt their business models. They must clearly explain their value to clients and negotiate compensation directly with homebuyers.
How are others in the Real Estate Industry Reacting to the NAR Settlement Agreement?
Several major brokerages have stated that they will be leaving, or have already left, the real estate trade organization NAR. The first to leave was Redfin (Oct. 2023), followed by RE/MAX, Anywhere Real Estate (formerly Realogy), Coldwell Banker, Century 21 Real Estate, and Sotheby’s International Realty.
Will the future of California real estate rebates be affected?
Tying this in with the initial question of this post, the exact effects that the NAR settlement could have on commission rebates offered by California real estate agent – Jack Schoberg or other agents in the state and agents throughout the US is currently unclear. Unified adoption of practice changes within the real estate industry could take some time, with bumps in the road along the way expected.
However, one definitive aspect of the NAR settlement is that the buyer agent’s compensation will no longer be pre-established or displayed in MLS listings, or coupled with the seller’s total commission. Nevertheless, buyer agent commissions may continue to be commonly accepted and paid by the seller. The determination of transactional costs often relies on industry customs and traditions, which are typically followed without much deviation.
If buyer agent commissions remain predictable under the new practices, commission rebates may still be offered. However, it is difficult to anticipate the feasibility or practicality of real estate commission rebates until these changes are implemented in actual transactions. With several brokerages leaving NAR, the future of buyer agent commissions and commission rebates is truly anyone’s best guess… for now.
Final Thoughts
While Buyer-Broker compensation offers will no longer be listed in the MLS, they are still perfectly acceptable outside of the MLS. Art Carter, CEO of the largest MLS in California, the “California Regional MLS” or “CRMLS,” sheds some light on a possible alternative, “It’s possible sellers could list an amount for concessions in their MLS listings, instead of compensation offers, and buyers could use those concessions as they choose — perhaps paying for repairs, for closing costs or to compensate their agents, Carter said. Carter continues with a summary of the NAR lawsuit that is simple and concise, “The only certainty I can give you is the process will change” (Collins, 2024).
Sources:
1.) Jeff Collins (2024). ‘Realtors Settlement Brings Confusion, Relief to Southern California’s Real Estate Industry‘. The Orange County Register. 27th, July.
https://www.ocregister.com/2024/03/17/realtors-settlement-brings-confusion-relief-to-southern-californias-real-estate-industry/?clearUserState=true
(Accessed: July 27th, 2024)
Notice:
Are you planning on buying or selling real estate and would like to save a substantial amount on commissions? Contact Jack Schoberg, or visit our Buyers or Sellers pages for more information.
Sellers list for just 1% commission with our highest-quality MLS listings. Buyers receive a 50% commission rebate up to 1.25% cashback.
