Taos realtors: NAR settlement will improve professionalism, spur competition
Some Taos realtors are unfazed by a recent $418 million settlement reached in a federal antitrust lawsuit that accused the National Association of Realtors of price fixing and artificially inflating home prices to the benefit of its members.
Local realtors said the decision will force positive changes in their industry, such as increased transparency, while likely causing realtors who failed to disclose flexibility in the commission process for selling a home to seek new professions.
The original complaint filed by defendants in the suit targeted NAR — specifically the realty groups of Realogy Holdings Corp.; HomeServices of America, Inc.; RE/MAX Holdings, Inc.; and Keller Williams Realty, Inc. — for requiring home sellers to pay for the buyer’s broker, which they alleged inflated home prices to their benefit.
This fee is in reference to a percentage of the home price, usually represented as 6 percent, which would be split evenly between the seller’s broker and the buyer’s broker as their commission. Although often represented as six percent, this portion of the home buying process has always been negotiable, according to Marika Choma, a Taos-based realtor for the past 29 years and owner and qualifying broker at Taos Real Property, a branch of Keller Williams Taos.
This slice of the price is also what a realtor depends on for
“This will challenge people and maybe in a good way. It will challenge people to step up to the plate and be professional. There’s a lot of positives that can come out of this, and that’s how I see it.” Marika Choma, Taos realtor
payment, she added.
“One big misunderstanding that I think spurred this lawsuit is that the people that brought the lawsuit felt like they were forced to pay a 6-percent commission and that if they didn’t, they wouldn’t be able to sell their house,” Choma said. “I don’t know who their realtors were, but that is not the case.”
As a result of the settlement, home sellers are expected to pay smaller commissions, allow
ing them to retain more of the proceeds from selling a home. Home buyers would then be able to decide how much to pay their own agents.
Choma said the realtors she knows have always engaged in a negotiation with their clients about a fair commission for their services. Some experts have speculated that, once the settlement is approved in July, housing prices may fall. Choma said the most significant changes the landmark decision will likely spur pertain to realtors themselves, increasing competition and improving services.
“This will challenge people and maybe in a good way,” Choma said. “It will challenge people to step up to the plate and be professional. There’s a lot of positives that can come out of this, and that’s how I see it.”
Diane Enright, a local realtor since 1991 who works as an associate broker with Berkshire Hathaway Taos Real Estate, said the settlement might actually add to a home buyer’s costs and make negotiations more complex.
“What’s interesting is that this is happening right now when the big focus has been on affordable housing,” Enright said. “Buyers can’t afford their down payment, they can’t afford the interest rates. So how will they afford a buyer’s broker?”
Enright echoed Choma regarding how the settlement may reduce the number of working realtors, drawing a parallel to the downward pressure artificial intelligence is expected to have on many job markets in coming years.
The National Association of Realtors continues to deny any wrongdoing in their written statements in response to the settlement, which will be paid out over the course of four years. More than 21 million Americans may be eligible to make a claim for a portion of the settlement.