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$418 million lawsuit settlement could lead to housing market makeover

Lower real estate agent commissions could mean lower home prices

ROANOKE, Va. โ€“ There could soon be a housing market makeover.

A $418 million lawsuit settlement means the standard 6% commission paid by the seller will no longer be the norm. Those fees were often bundled into the listing price of a home and the costs fell to the buyer.

Now, buyers and sellers will be empowered to negotiate commission fees. Lower commissions could mean lower home prices.

Some buyers may forgo a broker altogether to try to save money.

โ€œThis is one of the biggest purchases most people make. To do it without representation I think is a risky move,โ€ said Norm Pullen, a team lead and an owner at Keller Williams Realty Roanoke.

He said commission fees were always negotiable and he believes the Virginia housing market wonโ€™t see a big difference.

โ€œItโ€™s going to be our job as agents to communicate that value [we provide]. And itโ€™s going to be up to the consumer, as it always has, to pick who they want to work with and what services they want to pay for,โ€ Pullen said.

The question remains how the change could impact the housing market, especially given high inflation and high interest rates.

โ€œIn many ways it is a landmark case,โ€ said Jonathan Everett, an assistant professor with Virginia Techโ€™s Blackwood Department of Real Estate. โ€œI donโ€™t know that anybody really knows exactly what the implications will be. I fully believe a lot of itโ€™s going to come down to how the market reacts.โ€

He said the settlement is a reminder that you can and should negotiate.

โ€œThereโ€™s balance in everything, right? No oneโ€™s going to work for free. You get what you pay for,โ€ said Everett. โ€œAsk around. Shop around. Talk to a variety of different agents,โ€ said Everett. โ€œLearn about their expertise and what they bring to the table and what services they truly provide. And ultimately, select the best option that meets your needs at a competitive price.โ€

A judge still needs to sign off on the settlement. If that happens, the changes will take effect around July.


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