Unraveling the Myths of the NAR Settlement: A Comprehensive Guide


In the wake of the National Association of Realtors (NAR) lawsuit settlement, speculation abounds regarding its impact on home prices and market dynamics. David Wilson from Carolina’s Choice Real Estate takes a deep dive into what this landmark settlement truly means for buyers and sellers alike.


The Misconception of Falling Home Prices

A common narrative suggests that the NAR settlement will precipitate a drop in home prices and increase market activity. However, this assumption is far from accurate. In reality, the commission negotiated between a seller and their agent doesn’t dictate the list price of a home. Instead, market conditions play a pivotal role, and there is no universally standard commission rate.


Understanding Commissions and List Prices

Many articles erroneously base their assumptions on a 6% commission rate. However, as David Wilson explains, while many agents may charge this rate, it is neither standard nor fixed. Commissions are fully negotiable, and at Carolina’s Choice Real Estate, a low flat fee model offers a stark contrast to the high percentages elsewhere.


Real-Life Pricing Example

Consider a hypothetical home valued at $500,000, based on comparable sales in the neighborhood. If a 6% commission is agreed upon, with half offered to the buyer’s agent, the total cost in commissions would be $30,000. Should the seller opt for a lower commission rate or Carolina’s Choice’s flat fee model, it’s unrealistic to expect the seller to reduce the home’s list price accordingly, despite saving on commission costs.


The Buyer’s Perspective

The settlement has nuanced implications for buyers, particularly in terms of agent representation and associated costs.


Risks of Unrepresented Buyers

In North Carolina, a caveat emptor (buyer beware) state, unrepresented buyers face significant risks. Sellers are not obligated to disclose all material facts about their property, leaving buyers vulnerable to overlooking critical issues unless they have professional guidance.


The Cost of Due Diligence

Buyers typically pay a non-refundable due diligence fee, which can amount to tens of thousands of dollars. This fee is crucial for conducting necessary inspections and securing the deal, but it adds a substantial financial burden.


The Financial Impact of Agency

If buyers choose to hire their agents, they must bear the cost of the agent’s commission, which effectively maintains the home’s price at market value, plus the additional expense of the agent’s fee. This arrangement hardly seems beneficial from the buyer’s perspective, contrary to what some proponents of the settlement might claim.


Uncovering Material Facts

Both the listing agent and the buyer’s agent have a duty to uncover any material facts about a property. Many homebuyers, especially first-timers, may not know the critical aspects to inspect. This lack of knowledge can lead to expensive and potentially disastrous oversight.



The NAR settlement is a complex issue with far-reaching implications for everyone involved in real estate transactions. It’s crucial for both buyers and sellers to understand how commissions, market conditions, and negotiations influence the pricing and selling process.


Your Thoughts

What are your views on the NAR settlement? Do you believe it will benefit the real estate market, or are there better ways to address these issues? Join the discussion below and share your insights.

Thank you for reading, and if you have any specific questions or need further clarification on how the NAR settlement might affect you personally, feel free to reach out or leave a comment. Carolina’s Choice Real Estate is here to guide you through your real estate journey with expert advice and support!


Video Transcript:


“There have been numerous articles about the recent NAR lawsuit settlement, and the common theme in every one of these is that this will lead to a drop in home prices and more activity in the market. And nothing could be further from the truth.

Hi, I’m David Wilson with Carolina’s Choice Real Estate, and today I’ll be discussing the impact this settlement may have.

Okay, so the commission that is negotiated between a seller and their agent is not what drives the list price. The list price is driven by the market conditions, and on top of that, there is no standard commission. For those of you that have worked with my firm, you are very aware of this because of our low flat fee model. However, all these articles are basing this off of a 6% commission being charged to the seller. And while many agents charge 6%, this is not the standard commission, and it is completely negotiable between the seller and their agent.

So let’s use an example of a home where all the comparable sales in the neighborhood suggest a list price of $500,000. If the seller and their agent agree to a 6% commission with 3% being offered to the buyer’s agent, that will cost the seller $30,000 in total commissions, with a buyer’s agent receiving $15,000 of that. Now, if the seller chooses to only offer 3% commission to their agent representing them, or in our case, a flat fee of roughly $3,800 and zero to the buyer’s agent, do you really believe that that seller is going to lower their price by an extra $15,000 when all the comps support $500,000? Absolutely not.

And on top of that, any buyer that is interested in that home is now going to have to pay their buyer’s agent out of pocket to represent them in the transaction, or if they cannot afford to do that, they will have to come unrepresented. And if you are unrepresented in North Carolina, which is a caveat emptor state, which translates to buyer beware. The seller has every right not to disclose any material facts about the property that a buyer should be aware of. It’s the listing agent and the buyer’s agent’s duties to try and uncover any material facts for the property.

Many homebuyers are not going to know what to look for when it comes to material facts when walking through these homes. And the buyer typically has to pay a non-refundable due diligence fee, which can easily get into the tens of thousands of dollars for many homes. So if the buyers are forced to come into a contract because, or they’re unrepresented because they cannot afford to pay a buyer’s agent, there’s a strong possibility that they may be taken advantage of, and this could lead to a bad situation all around.

And if they can afford to pay a buyer’s agent’s commission now, they’ll be paying the same price for the home as well as a commission to their agent. This doesn’t sound like this benefits the buyer at all. Do you have any comments or questions concerning the recent NAR settlement? If so, leave a comment and I’ll be sure to respond. Thanks for watching.”

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