Have you heard of this recent news about NAR and the changes coming to the Real Estate Industry? Well, it is something new to talk about but I wouldn't say it is a 5 alarm fire drill. I can provide some insights on the recent legal case against the National Association of Realtors (NAR) and its potential impact on buyers and sellers of real estate so you are prepared should changes start unfold.
The recent legal case against NAR, known as the Moehrl v. NAR case, raises concerns about the anti-competitive practices of NAR and its impact on real estate transactions. The case alleges that NAR's rules, particularly those regarding the use of Multiple Listing Services (MLS), limit competition and result in higher costs for consumers.
This ruling will bring changes in the real estate industry which we will likely start to see some changes later this summer. Here are some potential effects on buyers and sellers:
1. Increased competition: If the case results in increased competition in the real estate market, buyers and sellers may benefit from more options and potentially lower costs. Honestly, the competition has always existed but I think this is going to allow that competition to become more apparent. This means that buyers and sellers will have more options but they need to be more educated on the process to protect themselves and make the best choice for their situation.
2. More transparency: The case may lead to increased transparency in real estate transactions, ensuring that buyers and sellers have access to all relevant information. I suppose that most people don't know that you could always negotiate the commission rate with the real estate agent. I think this will be part of this transparency and giving the buyer and seller negotiation power with the agents.
3. Changes in commission structure: The case will almost certainly lead to changes in the commission structure in real estate transactions. This will likely impact the brokerage firms and the commission structures within the firm. If the commission structures are now negotiable with the sellers and buyers for the agents' services, it will likely force these brokerage firms to rethink their internal commission structures to keep agents motivated.
4. Potential impact on real estate agents: If the case leads to significant changes in the real estate industry, it could impact real estate agents' business models and practices. Agents may need to adapt to new regulations or market conditions, which could ultimately affect the services they provide to buyers and sellers. It could also stress the industry to the point that agents leave the industry or look for a different way to supplement their income.
It is important to follow the changes that could occur in the real estate industry. Whether you are an agent, a buyer or seller, it's important to educate yourself. Know the process and the options you have so that you protect yourself and your investment.
Want to know more about the buying process? You can refer to our simple Real Estate Buying Guide if you want to understand the process and make sure you have a smooth timeline to the closing table.
More agent resources are coming for real estate agents given these potential changes in the industry.