BOULDER, Colo. - ColoradoDesk -- In a groundbreaking move, the National Association of Realtors (NAR) has reached a settlement in lawsuits alleging inflated costs for home sellers, leading to significant changes in its commission policies. The agreement, announced last month, includes a $418 million compensation fund for affected sellers and major revisions to the traditional real estate commission structure.

The lawsuits, brought by home sellers against the NAR and several major brokerages, challenged rules governing homes listed for sale on NAR-affiliated Multiple Listing Services (MLS). Under the terms of the settlement, the NAR will no longer require a broker advertising a home on the MLS to offer any upfront compensation to a buyer's agent. This change allows individual sellers to negotiate compensation with buyer's agents outside of the MLS platforms, with full disclosure required by the seller's broker.

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Jill Grano, an award-winning Real Estate Agent in Boulder with almost two decades of experience and a housing scholar at the University of Colorado, commented on the impact of the litigation, saying, "A key component of this litigation impacts how buyers' agents are paid. While commissions have always been negotiable, sellers have often paid both the listing agent's commission and the buyer's agent's commission. Moving forward, more sellers may choose not to pay the buyer's agent's commission, but it could make their home less attractive to potential buyers."

"Offering a buyer's agent commission could be one more way to make your home stand out," added Grano. "Sellers pay a good deal of money outside of commission to make their home attractive to buyers, such as staging, painting, cleaning, repairs, upgrades, etc. Offering a buyer's agent commission is one more way to make your home stand out. With this new litigation, I can see some sellers wanting to actually offer MORE than the 'usual' buyer's agent commission."

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Grano urges real estate professionals not to lose sight of their value amidst the headlines. "There is an excellent academic study, published in 2021 in the Journal of Housing Research, that finds that FSBO homes sell for significantly lower prices than comparable homes sold by agents, even after accounting for the commission rate. In Los Angeles County, FSBO homes sell for 7.4% to 8.4% less, while in Clark County, they sell for 7.6% to 8.8% less."

About Jill Grano
Jill Grano is a third-generation Real Estate Agent in Boulder, Colorado. With two decades of experience and dozens of professional accolades, she's well-equipped to help clients buy their dream homes and sell their greatest investments. To connect with Jill, reach out online.