Photo by RDNE Stock project
NAREB, the premier network of Black real estate professionals and advocates for Black homeownership, announced an action plan to help members navigate the industry’s new environment created by a lawsuit settlement that effectively upends the way real estate is bought and sold in the United States.
In a move to end antitrust lawsuits brought by homeseller groups, the National Association of Realtors (NAR) on March 15 agreed to pay the groups $418 million in damages and to eliminate rules on commissions. The class action lawsuits challenged the decades-old system requiring agents of homesellers to split the commission on sales with the agents of homebuyers, arguing that the buyer should pay the cost of its agent’s commission, not by the seller.
Last October, a federal jury in Missouri found that NAR, one of the nation’s largest real estate trade associations, and multiple brokerages violated antitrust laws by conspiring to inflate agent commissions and therefore were liable for $1.78 billion in damages to the plaintiffs. The New York Times reports that Americans have long paid unusually high commissions to real estate agents, with the typical commission in the U.S. almost 6 percent, compared with 4.5 percent in Germany, 2.5 percent in Australia and 1.3 percent in Britain.
NAREB President Courtney Johnson Rose, Ph.D., acknowledges that many NAREB members may be affected by the commission changes because the majority are usually buyers’ agents.
“NAREB recognizes that this settlement, if approved by the judge, will bring dramatic changes to our industry,” Rose said Monday. “Our members often represent Black families and individuals who struggle to raise money for the down payments needed to purchase homes due to decades of discrimination and a lack of generation wealth. Paying the commission for their agent will be an added burden.”
Under its action plan, NAREB will:
Appoint a special task force to study the projected impact of the settlement on its members, as well as the Black community. The task force will recommend how the organization can best assist its members and prevent the settlement from limiting the growth of Black homeownership.
Develop a Realtist Toolkit for its members that will include the most relevant information and access to resources that can assist them.
Scale up the NAREB Black Developer Academy, which was launched this year to provide technical assistance, training, and education to members who want to become real estate developers. This can provide additional revenue avenues while helping increase the housing inventory in communities of color.
Leverage the 100-city NAREB Building Black Wealth Tour and the NAREB National Building Black Wealth Day on April 13 to strengthen the connection between members and the communities that they serve. While educating Black consumers on purchasing homes and building wealth, members will also explain the services and value they can bring to our communities.
“With NAREB at their side, our agents and brokers will flourish and impact communities like we have for the past 77 years. Our organization was founded at the peak of housing discrimination; our members have always had to be resilient as we fought for and continue to fight for democracy in housing,” Rose said, noting the training and educational courses the organization provides at various conferences throughout the year.
