REALTOR commissions and the housing market outlook; what you need to know

FORT WAYNE, Ind. (WANE) — The National Association of REALTORS recently agreed to pay $418 million in damages to settle a series of lawsuits alleging it conspired to boost agent commissions.

After that, various reports online stated that the NAR was getting rid of a “standard commission of 6%.”

The NAR then set out to set the record straight . The current board president of the Upstate Alliance of REALTORS, Michael Patmore, explained the settlement to WANE 15 on Tuesday.

He and the NAR both said there has never been a required commission of 6%. Sellers have and always will be able to negotiate that commission, which is then split with the buyer’s agent.

The NAR, which maintains there was no wrongdoing, did agree to change a rule that required commissions to be listed on Multiple Listing Services (MLS) which are databases REALTORS share for-sale homes. Lawsuits against the NAR alleged the listing of the commissions caused them to be inflated.

“It’s extremely misleading when we saw that. I would say every REALTOR would agree that it’s just false. It’s just inaccurate, honestly. There’s never been a set rate, really. Never has been. Never will be,” Patmore said. “We can’t do that, nor is it good for the consumer or us to do that. So, we’re out there trying to provide homeowner rights and private property rights and that’s really our focus and doing what’s best for our clients. At the end of the day that’s what we’re here for.”

Another part of the settlement calls for buyers to enter into written agreements with their REALTOR. This is something also outlined in House Bill 1068 , which Governor Eric Holcomb signed into law and goes into effect on July 1.

Patmore says a buyer/broker agreement allows agents to clearly define their services , which he said are extensive and usually exceed what people realize.

These changes are coming ahead of what could be a very busy housing market this year.

With the Federal Reserve projecting lower interest rates, it could lead to more people wanting to sell and more buyers finally making the move to purchase a home.

“I think we’re going to see a wave in buyer demand that we’ve never seen before,” Patmore said. There’s been a lot, a lot of buyers on the sidelines during the course of this last year and a half to two years of just like pent up demand and people just saying ‘Well, I can’t afford to do this.'”

He said the increase in demand could drive prices up and create more bidding wars. That’s especially because there’s still a shortage of supply in Indiana and across the nation.

Patmore told WANE 15 that the latest statistic he saw suggested we’re five million units short of meeting the demand across the country.

His biggest suggestion is for anyone looking to buy or sell to use a real estate agent. He says you wouldn’t go to court without an attorney and you should have a trained professional guiding you when you’re making one of the biggest purchases, if not the biggest purchase, of your life.

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