Will Lawsuits End 6% Commissions? Probably Not, 1 Law Professor Says

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A provision in NAR’s settlement barring listing agents from offering buyer agents compensation is deemed “largely symbolic,” according to USC professor Jordan Barry speaking at a University of Minnesota conference.

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A law professor from the University of Southern California expressed skepticism about the impact of the recent commission lawsuit settlement by the National Association of Realtors, suggesting it may not bring about significant change but hinting at the need for more drastic measures.

Jordan Barry, the first speaker at a virtual conference diving into the implications of the March 15 settlement, suggested that the provision in the settlement preventing listing agents from providing compensation to buyer agents is more symbolic than effective. He emphasized the need for broader market changes to create a more competitive environment.

The conference, titled “Will the NAR settlement end 6 percent real estate commissions?” delved into various perspectives on the issue, including insights from legal experts, real estate industry leaders, and journalists. Journalist Anna Bahney, who spoke at the event, defended the idea of shopping around for agents willing to accept lower commissions, despite differing opinions within the industry.

The ongoing debate over commissions, agent pay, and lawsuits against major real estate companies continues to fuel discussions within the industry. The settlement reached by NAR and other organizations has raised questions about the future of commission structures and market competitiveness.

The recent commission lawsuit settlement from the National Association of Realtors, which involves paying $418 million in damages and making reforms, is unlikely to bring about significant change according to USC professor Jordan Barry. The provision in the settlement that bars listing agents from offering compensation to buyer agents is seen as largely symbolic and may not have a significant impact. The conference titled “Will the NAR settlement end 6 percent real estate commissions?” discussed the implications of this settlement. Barry argued that agents have a financial incentive to steer clients towards properties with higher commissions, and enforcing anti-steering rules may not be effective. He suggested that creating a more competitive market structure and disconnecting seller offers from buyer agent earnings could be a better solution. Journalist Anna Bahney defended her claim that the 6 percent commission on buying or selling a home is gone, despite Barry’s assertion that the settlement may not bring about major change. The event highlighted the ongoing debate over commissions, agent pay, and the increasing number of commission-focused lawsuits in the real estate industry.

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