(The Center Square) – Illinois home buyers are now facing a different landscape in the real estate industry.
For decades, the National Association of Realtors (NAR) required home sale listing brokers to provide an offer of compensation to a buyer’s agent up front. That usually was a 6% split between a seller’s broker and buyer’s agent.
Groups of home sellers brought lawsuits against the NAR for its standard commission structure, saying it was a violation of antitrust laws. The NAR settled the case for $418 million. Now new rules in place dictate that home sellers are no longer obliged to offer credits for a buyer’s agent.
Under the settlement, NAR agreed to put in place a new rule prohibiting offers of compensation on listing databases governed by the group, also known as multiple listing services (MLS), to put to an end a series of lawsuits claiming broker commission policies resulted in inflated fees.
Jenna Hamm, CEO of the Peoria Area Association of Realtors, told WEEK-TV in Peoria that buyers may not view a home until they sign a buyers agreement.
“Buyers will have to be very diligent in the homes they want, and with the terms they’re looking at to purchase a home. The buyers will submit an amendment to our purchase agreement,” said Hamm.
Nick Pisano with Clever Real Estate said the changes may force some realtors out of the business.
“When you’re having to get buyers to sign an agency agreement before you even get started, that is a little more difficult and time consuming for agents who only do a couple deals a year,” said Pisano.
What effects the changes will have on the Illinois real estate market remain to be seen. The changes come just as the Illinois housing market is gaining momentum. With mortgage rates coming down, there was a 6% uptick of home sales in July statewide compared to a year ago.
Home prices in Illinois continue to climb. Prices were over 8% higher in July compared to July 2023. The median sales price of a home in Illinois is now at $308,000.