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IPFS News Link • DOJ-Department of justice

Is this the death knell for broker fees?

• https://www.dailymail.co, By NEIRIN GRAY DESAI

The Justice Department is reportedly considering taking legal action against the National Association of Realtors (NAR) as part of an unprecedented clampdown on broker fees.

Commission, which can be as much as 5 or 6 percent of a property's value, is usually shared down the middle between the two brokers representing the buyer and seller.

On the median $407,100 home sale in the US, a 5.5 percent commission amounts to about $22,390.

After a years-long investigation by federal antitrust enforcers, action is now on the cards, a person familiar with the issue told Bloomberg, to scrutinize the broker commission system. 

The NAR is a trade association of real estate brokers and agents in the US. It has over 1.5 million members - making it the largest professional organization in the country - and owns the trademark to the word 'Realtor.'

The association has control of many of the country's multiple listing services - platforms used by real estate agents and brokers to share information about properties for sale and find listings for prospective buyers. 

To use the system, NAR requires brokers to be members of the organization. Sellers must also offer compensation to the buyer's representative. Critics say that inflates home prices.

A DOJ spokesperson declined to comment to DailyMail.com.

It comes after a study by credit firm Self Financial found that this year the highest real estate broker commission rates were in Ohio, Georgia and Missouri, with rates of 5.81, 5.76 and 5.72 percent respectively.


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