The real estate industry in Illinois is undergoing significant changes, presenting a new landscape for home buyers.
Decades ago, the National Association of Realtors (NAR) had a requirement for home sale listing brokers to offer compensation to the buyer’s agent at the beginning of a transaction. Typically, this compensation involved a 6% split between the seller’s broker and the buyer’s agent.
Home sellers united and filed lawsuits against the NAR, claiming that its standard commission structure violated antitrust laws. Eventually, the NAR resolved the case by paying a settlement of $418 million. As a result, new regulations have been implemented, stating that home sellers are no longer required to provide credits for a buyer’s agent.
Under the settlement, NAR has agreed to implement a new rule that will prohibit offers of compensation on listing databases controlled by the group, otherwise known as multiple listing services (MLS). This move comes as a resolution to a string of lawsuits that have alleged that broker commission policies have led to artificially inflated fees.
According to Jenna Hamm, CEO of the Peoria Area Association of Realtors, buyers will not be able to view a home until they have signed a buyers agreement, as reported by WEEK-TV in Peoria.
According to Hamm, buyers need to be extremely thorough when selecting homes and considering purchase terms. They will need to submit an amendment to the purchase agreement.
According to Nick Pisano from Clever Real Estate, the alterations could potentially push certain realtors out of the industry.
According to Pisano, it can be quite challenging and time-consuming for agents who only handle a few deals a year when they have to convince buyers to sign an agency agreement before commencing the process.
The impact of these changes on the Illinois real estate market is still uncertain. These changes coincide with a period of growth in the Illinois housing market. In July, there was a significant increase of 6% in home sales statewide, compared to the previous year, thanks to the decrease in mortgage rates.
In Illinois, the housing market continues to witness a steady rise in home prices. In July, prices surged by more than 8% as compared to the same period in 2023. Consequently, the median sales price of homes in the state has reached an impressive $308,000.