The Florida real estate market will begin to feel the impact of the $1.8 billion lawsuit filed against the National Association of Realtors. The judgment was handed down in October 2023, with a jury in Kansas City, Missouri ruling that real estate commissions had been artificially inflated in a conspiracy between the National Association of Realtors (N.A.R.), HomeServices of America, and Keller Williams Realty.
The standard commission rate charged by realtors is approximately 6% of the sale, which is traditionally paid by the seller. The Missouri lawsuit was filed by sellers who claimed they did not know that this fee was going to the buyer’s broker. As a result of the ruling, compensation offered to a buyer agent in the Multiple Listing Service will no longer have a minimum of $1.00. The minimum is now $0.
Florida real estate agent Callen Jones spoke to Spectrum News about the impact the lawsuit will have on Florida’s real estate market. Jones is opposed to the ruling and is worried about the changes they are seeing locally. “The perception has changed,” Jones said. “Sellers feel like they have more chances to choose. On the flip side, if you are a buyer’s agent, you now can’t guarantee that the seller is going to pay your commission.”
“You have to go back many decades on why commissions were formed this way because they wanted buyers to have their own representation,” they continued. “If one real estate agent represents both parties — you cannot equally represent the interest of everybody.”
In addition to these issues, Jones asserted that first-time home buyers and veterans would be particularly vulnerable under the new system. “We are in a market with a military base. We have a lot of folks, either military or veterans, who use a VA loan,” Jones said of Florida’s market. “The VA loans state that they cannot pay commission. So if a VA buyer is interested in a house and they’re not offering commission, well now what?” The bottom line is that some real estate agents could work for months setting up a client in a new home, and not get paid any commission.
The N.A.R. has already announced that they will be appealing the lawsuit. However, the organization is currently crumbling due to other legal problems and negative press. Former N.A.R. president Kenny Parcell recently resigned after a New York Times article exposed his pattern of sexual harassment. Parcell has denied these claims. Former chief executive Bob Goldberg and former head of human resources Donna Gland both retired unexpectedly after backlash from the article. The N.A.R. is floundering after the resignations, the Missouri lawsuit, additional lawsuits, and the general loss of respect from the real estate community. Re/Max and Coldwell Banker, two of the nation’s largest brokerages, have announced they will no longer require agents to be members of the N.A.R.
The National Association of Realtors has controlled the Multiple Listing Service database for the past century, meaning real estate agents had to be due-paying members to access nearly all home listings in the country. The organization holds over $1 billion in assets and has even trademarked the word “realtor.” Its future remains uncertain, and the market will undoubtedly continue to be affected by its next moves.
