By Mike Wendling,BBC News in Chicago
Getty ImagesA settlement in a case against US estate agents could mean a reduction in the cost of buying and selling houses.
The National Association of Realtors (NAR) and property companies were accused of artificially inflating sales commissions in a series of lawsuits.
A settlement including $418m (£328m) in damages was announced on Friday.
The NAR agreed to make it easier for buyers to negotiate fees, which may eventually result in lower buying and selling costs.
The settlement is expected to increase competition in the US housing market, where a 6% commission on the sale price is considered standard.
At the median US house price of $417,700 (£328,000), the standard commission works out to just over $25,000, a cost that is often passed on in whole or in part to the buyer.
In November 2023, a federal jury in Missouri ordered the NAR and brokerage firms to pay $1.78bn (£1.4bn). Under US anti-trust law, those damages could have been potentially tripled by a judge. That case eventually led to the settlement announced on Friday.
The NAR, headquartered in Chicago, says around 1 million of its members are covered by the settlement, which is subject to final approval by a court.
The association runs a property database called the multiple listing service, or MLS, and requires home sellers to offer a non-negotiable commission rate before their properties are included.
Without that requirement, buyers will have more freedom to negotiate lower commission rates or flat-price fees on sales. The settlement also includes other provisions that have the potential to drive down transaction costs.
“NAR has worked hard for years to resolve this litigation in a manner that benefits our members and American consumers,” NAR interim chief executive Nykia Wright said in a statement. “It has always been our goal to preserve consumer choice and protect our members to the greatest extent possible. This settlement achieves both of those goals.”
Under the terms of the settlement, which will take effect in July, the NAR and property companies are not required to admit wrongdoing.
Robert Braun, a Chicago-based lawyer representing homebuyers in two class-action cases against estate agents, called the “a big change from the old norms”.
“But whether this will actually change prices in the housing market remains to be seen,” Mr Braun said in an email.
The settlement did not resolve a number of other lawsuits against property companies or a potential federal investigation into the NAR. Estate agents in Canada also face similar legal action over buying and selling fees.
