The way you buy or sell a home in Las Vegas is about to change dramatically

The settlement in a massive class-action lawsuit that alleged real estate agents were artificially inflating commissions has the National Association of Realtors, the country’s largest trade organization, on the hook for a number of policy changes that impact how commissions are negotiated and charged. NAR agreed to a whopping $418 million settlement along with a handful of new rules for its 1.5 million members, however it did not admit any wrongdoing.

Buyers have to sign agreements

Tim Kelly Kiernan, branch manager of Realty ONE Group’s Summerlin office, said one of the biggest changes will occur early in the homebuying process. Buyers will have to sign a form before being shown any houses, he said.

“Let’s say your cousin says I am a good Realtor, and so they say, ‘I’d like to go see this house today at three o’clock because I saw it on Zillow,’ ” he said. “Normally I would just meet that person at the house, but now we can’t do that. I have to sit on the phone to try and explain to you that you have to sign this form before I can show it to you. And this form commits you to paying me money, which has never happened before.”

The changes come amid heightened mortgage rates that have dropped in the past few weeks yet remain historically elevated. Redfin lists the 30-year fixed-rate above 7 percent, which includes fees, a benchmark that was most recently cleared in late 2022 due to inflation caused by pandemic restrictions. Prior to that, the last time mortgage rates were above 7 percent was 2002.

Las Vegas Realtors President Merri Perry deferred to NAR for comment on the changes coming because of the settlement, but the group has released a slew of information on its website.

Buyer-agent compensation removed from listings

One other big change relates to the multiple listing service, which NAR controls and where the vast majority of properties are listed. Blanket offers of compensation on behalf of sellers to buyers’ agents will no longer be included in listings posted on the MLS.

Prior to the settlement, real estate agents could put offers of compensation within the MLS listing, which other real estate agents could see, but consumers couldn’t. Real estate agents who spoke to the Las Vegas Review-Journal said this change will push negotiations for commissions to the forefront, out in the open and bring about more “transparency” to the process of buying and selling homes.

But will these changes cause a drop in commission rates and home prices? Multiple real estate agents said everyone is going to have to take a “wait and see approach” to how the rules impact the wider industry.

Brandon Roberts, president of Nevada Realtors, said he is largely in favor of the changes and added this will be a good time for the industry to reinvent itself. Commissions for real estate agents across the country and in the valley have already dropped close to a percentage point since the start of this year. He said commissions could drop further, and real estate agents with less experience could drop out of the business altogether, however this all remains to be seen.

“I always believe that people pay for value,” he said. “And so for me, what I think this will do is some agents will make more and some agents will make less depending on their ability to demonstrate value.”

Anna Klinger, co-owner for Nevada Desert Realty, said a more open and transparent process is something she is in favor of, but she is not sure commissions or home prices will invariably drop.

“I wouldn’t necessarily agree with that,” she said. “Commissions are 100 percent negotiable.”

Home prices in the valley are close to record highs again, according to the latest figures from Redfin, and condos and townhomes have already broken previous records. Las Vegas finds itself in the middle of a housing crisis and lacks adequate land to develop for residential and commercial uses due to federal government control, real estate stakeholders told the Las Vegas Review-Journal.

Contact Patrick Blennerhassett at pblennerhassett@reviewjournal.com.