The National Association of Realtors (NAR) settled a lawsuit in which a federal jury ruled the organization had conspired to artificially inflate commissions. The group agreed to pay $418 million in damages and amend several rules around commissions.
KBW Managing Director Ryan Tomasello joins Yahoo Finance to discuss the settlement and how it may affect other players in the housing market.
Tomasello explains that consumers will have the most to benefit from the settlement: "We think these changing enacted in the settlement, if it goes through, are gonna stand to reshape the housing market in the greatest fashion we've seen in over 50 years. Historically, consumers have lacked a lot of transparency around the process of how commissions are set and paid, particularly home buyers. We think that these changes ultimately bring a lot more knowledge to home buyers in their ability to negotiate and sign off on those commissions. At the end of the day, hopefully that reduces commissions in aggregate by as much as 30% or more, we've estimated."
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