California court decision threatens real estate commission structure

Death, taxes, and real estate fees are constants in life. One in three could be at risk thanks to a recent court ruling. Real estate commissions have survived many attempts to reduce their value through technology and other means.

However, buyers and sellers of California homes can receive a discount on the 6% commission that is the industry standard for home sales. The commission structure is typically split 3 percent to the seller's agent and 3 percent to the buyer's agent.

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Hundreds of real estate agents recently gathered in New York to discuss the future of commissions in the wake of a court ruling awarding $180 million against the National Association of Realtors and other brokerages.

Barons It reports 19 additional lawsuits against real estate agents. NAR has spent millions defending its fees, including $52 million in Washington, D.C. The lobby is the second largest after the U.S. Chamber of Commerce.

The court found that real estate agents and others had artificially maintained commissions at a certain level.

From Mr. Barron's account of the incident:

“The $1.8 billion jury verdict found NAR and its brokerage firms, including Keller Williams and HomeServices of America, guilty of conspiring to keep brokerage commissions high. He initially filed a motion for a new trial.

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Consumer advocates hope the court's ruling will encourage more competition among real estate agents seeking to represent buyers and sellers. Challenges continue for real estate agents as high interest rates slow home sales across the state.