Your Home Selling Costs To Fall Following NAR Settlement
The standard 5% to 6% broker commission on home sales is about to become a thing of the past as the National Association of Realtors agrees to change rules.


The National Association of Realtors (NAR) has agreed to pay $418 million over four years and change certain rules to settle a series of lawsuits over the industry’s sales commission fees, a move expected to greatly decrease home-selling costs.
“No longer will homeowners be required under NAR rules to offer compensation to buyers agents," Michael Ketchmark, lead attorney for the plaintiffs in the case, told Kiplinger in an interview. The new rules "will return the sale of homes to the free market and allow technology to benefit sellers of homes."
Those changes will provide a huge opportunity for the cost of selling a home to drop dramatically, he added.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.

Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Under the settlement, which is pending court approval, NAR agreed to stop requiring homeowners to pay buyers agents commissions when they sell their homes, a practice in the U.S. that has been around for nearly 100 years, Ketchmark said. The average total commission rates in the U.S. — split between buyer and seller brokers — are 5% to 6% of the sale price, according to court documents.
NAR, which admits no wrongdoing in the case, has also agreed to draft new rules that prohibit broker compensation offers on its Multiple Listing Service (MLS) property database and that require MLS participants working with buyers to put their agreements in writing. These changes are set to become effective in mid-July.
The MLS has been used “as a vehicle for propping up and inflating commissions," Ketchmark said. “Probably the most significant part of the settlement is the changes to the way that homes are sold."
NAR, whose 1.5 million members make up the nation’s largest trade group, did not respond to a request for comment. In a statement, NAR sad it continues to encourage members to use buyer brokerage agreements that help consumers understand the services and value that will be provided.
“Ultimately, continuing to litigate would have hurt members and their small businesses,” Nykia Wright, interim CEO of NAR, said in the statement. “While there could be no perfect outcome, this agreement is the best outcome we could achieve in the circumstances.”
The settlement follows NAR’s loss in a district court case last October involving a conspiracy to artificially inflate commissions on home sales. A jury in that case ordered NAR and several real estate brokerages — including Berkshire Hathaway Energy-owned HomeServices of America — to pay about $1.8 billion in damages to roughly 500,000 home sellers in Missouri.
Non-negotiable commission rule challenged
In their suit, the home sellers challenged NAR’s rule requiring them to make non-negotiable commission offers to brokers to list their homes on MLS databases. A separate case involving similar charges and covering 14 states was also filed in Illinois.
NAR’s proposed settlement will resolve the Missouri and Illinois cases for all of those defendants — except for HomeServices of America, which is still litigating the Missouri judgement, Ketchmark said.
Wright said that NAR has worked hard for years to resolve the litigation “in a manner that benefits our members and American consumers.” The goal has been to preserve consumer choice and protect the group’s members to the greatest extent possible, she said, adding that the settlement achieves both of those goals.
The settlement is currently unavailable for the public to view but is expected to be filed next week. For more on the Missouri case, you can view the District Court for the Western District of Missouri Western Division filing here.
RELATED CONTENT
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Esther D’Amico is Kiplinger’s senior news editor. A long-time antitrust and congressional affairs journalist, Esther has covered a range of beats including infrastructure, climate change and the industrial chemicals sector. She previously served as chief correspondent for a financial news service where she chronicled debates in and out of Congress, the Department of Justice, the Federal Trade Commission and the Commerce Department with a particular focus on large mergers and acquisitions. She holds a bachelor’s degree in journalism and in English.
-
S&P 500 Hits New Highs as Rally Resumes: Stock Market Today
Tech stocks were the biggest gainers on Wall Street today, with Nvidia and Dell making notable moves.
-
The Shutdown Standoff Is Heading for Its Next Big Test
A key mid-October deadline could intensify the shutdown fight in Washington, and the fallout could soon hit workers and your wallet.
-
How Location Changes the Math on Owning a Vacation Home
The market you choose can make your dream getaway a smart investment — or an expensive mistake.
-
Adapting to AI's Evolving Landscape: A Survival Guide for Businesses
Like it or not, AI is here to stay, and opting out could be disastrous for your organization. Instead, focus on what you can control and be flexible, as AI is still evolving.
-
Where the Ultra-Rich Are Buying Real Estate Now
Why the ultra-rich are flocking to new corners of the world — and what their moves reveal about real estate hot spots.
-
Dealing With a Bad HOA Board? This Book Could Be Your Battle Plan
'Bad HOA' by Luke Carlson empowers homeowners to push back against unfairness, offering advice on dealing with challenging homeowners associations (HOAs).
-
It's Not Too Late for Wealth Advisers to Participate in the Silver Tsunami
With so many business-owning Baby Boomers set to retire, wealth advisers need a plan to ensure their business-owning clients and prospects become and remain their best clients.
-
Are AI Search Results Ghosting Your LinkedIn Posts? This Could Be Why
Posts generated by AI don't hold enough authority with AI search engines to significantly boost your visibility (yes, that's ironic!). Here's what you can do instead.
-
The $2.5 Billion Amazon Settlement: Key Dates, Claim Eligibility and More
Amazon agrees to a historic $2.5 billion settlement over its Amazon Prime memberships. Here's what you need to know about the case and filing a claim.
-
Home Equity in Retirement: Should You Sell, Borrow or Rent?
Learn how to preserve your property's value, tap equity for income and make smart choices about downsizing, renting or leaving a legacy.