Judge approves $418 million damages for home sellers overcharged by Realtors – will YOU receive a payout?

A $418 million settlement that will forever change the way Americans buy and sell homes has received preliminary approval from a federal judge.

U.S. District Judge Stephen R. Bough signed an agreement involving the National Association of Realtors (NAR) after it was accused of artificially inflating commissions by allowing real estate agents to collude on sales.

The NAR was sued in a landmark case by Missouri home sellers, paving the way for multiple copycat lawsuits.

Homeowners who have sold property in the last seven years may now be eligible for a payout, but they must do so file a claim no later than May 9, 2025.

Although Judge Bough signed off on the deal, it must still receive final approval from the court on November 22. This is largely seen as a formality.

Agents in the US charge home sellers an average commission of between 5 and 6 percent of the sales price of their property. That’s more than double the average fee charged in Britain, according to investment bank Keefe, Bruyette & Woods

The NAR – which has 1.5 million members – will begin implementing sweeping rule changes to the way its agents operate from September 16.

The crux of the case concerned the commissions NAR agents earned on home sales.

Estate agents in the US charge home sellers an average commission of between 5 and 6 percent of the sale price of their property – more than twice the average fee charged in Britain, for example.

It is paid in full by the seller, but is split between the two brokers in accordance with NAR standards.

The NAR is the largest trade association in the US and only its paying members are allowed to call themselves “Realtors.” They are also the only people who have access to the database of homes for sale.

These databases are called “multiple listing services” or MLSs and require the seller’s agent to list the commission amount their client pays. In theory, the system allows the buyer’s agent to ‘steer’ buyers to houses where the commission is higher, so that they can make more profit when they sell.

According to a survey by consulting firm 1000watt, more than 76 percent of 640 real estate agents in the U.S. said buyer’s agents would be more likely to show a home if they knew the seller was paying a higher commission.

In turn, the seller’s agent may tell clients that buyers won’t see their home if they don’t offer enough commission.

But under the new ruling, agents will essentially be barred from making those commission offers.

The buyer’s agent can see which properties have the best sales commission and ‘steer’ buyers there. More than 76 percent of agents said buyer agents would be more likely to show a home if the seller offered a higher commission

Real estate agent Desirae Wyckoff previously told DailyMail.com last year: ‘I feel like this gives real estate agents an unfair reputation.

NAR spokesperson Mantill Williams said of the preliminary approval, “It has always been NAR’s goal to resolve this lawsuit in a manner that preserves consumer choice and protects our members to the greatest extent possible.

“There are strong reasons for the court to approve this settlement because it is in the best interests of all parties and class members.”

The decision was welcomed by attorney Michael Ketchmark, who represented sellers in the lawsuit.

He said: “This is the first step in bringing about the long-awaited change. Later this summer, NAR will begin changing the way homes are bought and sold in our country, ultimately leading to billions of dollars and savings for homeowners.”

Real estate agents have previously expressed concerns about the impact of the lawsuit on their revenues.

Desirae Wyckoff told DailyMail.com last year: ‘I feel like this gives real estate agents an unfair reputation.

“I saw a lot of these people hang up their driver’s licenses.”

The Justice Department has also reopened its investigation into the NAR to scrutinize broker commissions and the way real estate listings are marketed.