What National Association of Realtor’s $418 Million Settlement Means for Charlotte Housing

By Charlotte Stories 3/20

The recent settlement of $418 million by the National Association of Realtors (NAR) in an antitrust lawsuit has raised questions about its impact on real estate commissions and, consequently, home prices here in Charlotte. The lawsuit accused NAR of keeping realtor commissions artificially high, affecting the overall cost of homes for sellers, which could also indirectly inflate home prices.

Traditionally, home sellers have been responsible for commissions on both sides, usually around 6% of the sale price, shared between the seller’s agent and the buyer’s agent. With the median home sale price in Charlotte last month standing at $425K, according to Realtor.com, the total commission for the average Charlotte seller would amount to $25,500.

Real estate professionals are divided on the settlement’s impact. Some believe it could lead to higher commission fees for buyers, or cause them to use the seller’s agent or no agent at all. Additionally, forced changes to the Multiple Listing Service (MLS) rules could prevent listings from indicating the commission an agent would earn, further complicating the payment structure and transparency.

Other industry professionals, however, think the settlement could bring positive change. David Hoffman, founder of David Hoffman Realty and author of Relationship Over Rules, sees a potential win-win for both clients and agents.

“Once the dust settles (right now, there is a lot of hyperbola and conjecture being stated), I actually like the concept,” said Hoffman. “I believe that once all parties; sellers, listing agents, buyers, and buyers agents understand the new rules, the two main changes will be that sellers will feel more in control over their bottom line, as they should be as one of the main decision-makers, regarding who they want to compensate and work with, and, buyers agents will need to best articulate their value and quickly.”

In terms of how the settlement might affect the Charlotte housing market, Hoffman thinks there may only be a slight decrease in demand. “For the small fraction of sellers who don’t want to compensate a buyers agent, demand may drop slightly, due to less buyers looking at that property,” Hoffman said. “This may affect the odds of a bidding war, or even an offer, increasing days on market, and leading to price reductions, but, I only see this happening 10% of the time, as even fsbo’s almost always offer compensation to a co-broker.”

The NAR’s $418 million settlement highlights the evolving dynamics of real estate transactions and the potential for increased transparency and fairness in agent commissions.