‘Wild, Wild West’: Realtor settlement sends Vegas market into uncharted territory
A massive National Association of Realtors settlement that was supposed to cause Realtor commissions to decline hasn’t done so, according to a new study.
The average buyer’s agent commission for homes sold across the nation in the month of October was 2.34 percent, virtually unchanged from August when it was 2.35 percent, according to a Redfin study.
Earlier this year, NAR settled a class-action lawsuit that alleged real estate agents were colluding to fix commissions for buyers and sellers. In the $418 million settlement, NAR agreed to two big changes, one that seller’s agents could no longer advertise commission fees to buyer’s agents via the Multiple Listing Service where the majority of homes are listed for sale, and that potential buyers must sign a contract with a real estate agent upfront before they show them homes. The changes were supposed to go into effect Aug. 17.
Steve Hawks, a Las Vegas real estate agent, said agents across the valley, like much of the country, are just “picking and choosing” which part of the NAR settlement they are abiding by, creating a new “Wild Wild West” for commission rates.
Anecdotally, he said he’s actually seen a sharp increase in commission rates since August.
“Commissions have actually skyrocketed since the settlement due to non compliance … and several different new settlement work around strategies,” Hawks said. “Many Realtors are pushing back against what they feel as a poor settlement from out of touch leadership the last 10 years on a local and national level.”
Nevada is adding real estate agents
Nationally, the real estate industry is shrinking since seeing a rush of new agents during the pandemic, but Nevada is actually bucking the trend and adding agents, according to a new study from Flatworld Solutions.
Market adaptations have already started to emerge, according to Cory Schaefer of Done In One Realty, who said some clients seem to know about the NAR settlement and it’s playing into the process for both buyers and sellers of homes.
“The biggest thing I’ve seen is it’s turned into a negotiating tool,” he said. “The market has quickly turned into a buyer’s market and that’s typical for a fourth quarter. Depending on what happens with interest rates moving into the first quarter will determine whether or not the buyer’s market peaks and the inventory disappears again like it did last year.”
Redfin Chief Economist Daryl Fairweather said commissions could still drop as more and more people educate themselves about industry changes related to the NAR settlement
“Commissions may face more downward pressure next year if we see a resurgence of bidding wars,” she said. “Sellers are becoming increasingly aware that commissions are negotiable and that if they have a desirable home, they may be able to get the buyer to cover some, or even all, of the buyer’s agent commission.”
“Of course, as in all real estate deals, any negotiation is dependent on how much demand there is for a property,” she added. “Sellers who are struggling to find a buyer may even offer more to help attract more interest.”
Contact Patrick Blennerhassett at pblennerhassett@reviewjournal.com.
