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House hunters fear Realtor settlement could make homebuying harder

Jeff Collins, The Orange County Register on

Published in Business News

Real estate investor Debra Falese called a landmark Realtor commission settlement “horrible” because it requires home shoppers to sign contracts with their agents.

That could leave buyers “locked into” working with unreliable agents, the Huntington Beach, California, property owner said.

New homeowner Morgan Hedrick worries the settlement will make it harder for future buyers if their broker fees come out of pocket instead of from the sale of the home.

And one home shopper outside an open house in Downey, California, was visibly angry, saying the settlement does nothing to help the consumer.

“Now I have to pay my own agent,” the man said. “There are so many hidden fees to begin with. Now you’re bombarded by another fee that can come out of your pocket.”

Homebuyers, sellers and the real estate industry as a whole are facing an uncertain transition under the proposed agreement the National Association of Realtors signed in mid-March.

 

Faced with more than 20 class-action lawsuits accusing NAR of price fixing, the trade group agreed to pay $418 million and to end the requirement that home sellers pay their buyer agent’s commissions.

A majority of home shoppers queried at open houses on a recent weekend either hadn’t heard about the settlement yet or, at best, had a vague idea of what it means.

But many who have followed the news expressed concern that first-time buyers or those new to an area will face additional difficulties because of the settlement.

Many buyers will have inadequate representation or no representation at all because they won’t be able to afford more experienced brokers, they said.

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