I'm Nicole Lappin, the only financial expert you don't need a dictionary to understand. It's time for some money rehab. Anyone who's interested in real estate, whether it want to be home buyers, want to be home sellers, real estate investors, we need to talk about a huge story in the real estate world that is shaking things up on all sides of the industry. But it's especially important for want to be sellers. And before I dive in, I just want to say right here, right now, if you want to sell your house, but you haven't listed it yet, you might want to wait until mid July to do so because it could mean keeping thousands of dollars in your pocket. And if you did just sell your house, You might be entitled to get some of that money back, too. This is all because of a series of lawsuits that were filed by home sellers against the National Association of Realtors, which is all coming to a head in a $418 million settlement. The lawsuit alleges that the National Association of Realtors' Practices were incentivizing the real estate agents representing buyers and the agents representing sellers to prioritize listings with higher commission fees.

As we know, typically when a house sells, there's a 6% commission fee that's split between the seller's agent and the buyer's agent, and that is entirely paid for by the seller. Now, the lawsuit alleges that there was collusion happening between agents through databases owned and operated by NAR's local affiliates called the MLS or multiple listing service. In these databases, buyer's agents could see listings, and importantly, what commissions they would make on each of those listings. So picture this. A buyer's agent is looking for a few listings to bring their client, and they see a $450,000 house listed that would earn them a 2% commission. So that would be $9,000. Amazing. And then they see another $450,000 house that would earn them a 3% commission. Commission. That's $13,500 in their pocket or a $4,500 bonus compared to the house with the same sticker price, but only a 2% commission. Can you see a world in which that agent would prioritize showing their client the listing in which they make a higher commission? Well, seller's agents might be thinking the very same thing. Of course, real estate agents representing the seller's want their properties, they're representing to get sold, right?

That's how they make their money. So this means that there was an incentive for the seller's agent to keep commissions high to better the chances that buyer's agents would push for that listing. Can you picture how this is playing out? Yeah, that's what these lawsuits were alleging. Sellers have been feeling for years that these incentives have caused agents on both sides of these transactions to keep commissions high. But after this settlement, sellers will no longer be on the hook for the commission for the buyer's agent. This is huge because like I said earlier, typically the seller pays the commission commission for their agent and the buyer's agent. Because of this change, sellers will now have really good negotiating leverage for cutting the commission on their home sale in half. So let's go back to the $450,000 house, for example. If you listed it now, pre-settlement, you'd still be expected to shell out 6 % or a $27,000 commission. Again, that commission is negotiable, but 6 % is definitely standard. But if you wait until these lawsuits are settled, which is projected to be mid-July of this year, you could lock in something like a 3 % commission fee, which would save you more than 13 grand.

Of course, there are other factors you should take into consideration when deciding to sell your house. Like, normally the spring is a great time to sell. Plus, we're not sure how exactly the settlement is going to affect home prices. But it is certainly worth talking to your financial advisor about. Similar to the Silicon Valley bank crash over a year ago, you remember that that was the first bank to collapse in 2023 that infected financial services industry pretty heavily in the months that followed. This lawsuit has the potential to infect other businesses in real estate beyond just the NAR. One company that is already feeling the pain is Berkshire Hathaway Energy, the unit of Warren Buffet's Berkshire Hathaway that controls Home Services of America. It's unclear as of right now what the fallout will be for Berkshire Hathaway Energy specifically, but the lawsuit claims that the company defrauded home sellers working with representatives of Hathaway by $4.2 billion in 2023 alone. But at the end of the day, this is great news for sellers, and a transition that will definitely save Americans billions of dollars. Yes, billions with a B. Americans paid roughly $100 billion in real estate commissions every single year.

So if that's cut in half, that is billions of dollars of spending power back in sellers' pockets. So this is awesome news for sellers, but not necessarily great for buyers. If you're looking to buy a house this summer, watch out, because this settlement could mean that your agent is now going to expect their commission to come from you, which, of course, would need to impact how you're budgeting for your home. I'm sorry, my sweet, sweet home buyers. I hope you can catch a break soon. For today's tip, you can take straight to the bank. If you sold your house between March 2015 and December 2020, you might be entitled to get some money back from the settlement. In order to see if you're eligible, check out real estate commission litigation. Com, or click the link in the show notes. I know this sounds like some weird late-night infomercialy domain, but it is indeed the website. The $418 million settlement is pretty massive. So if you sold your house in recent years, you should definitely see if some of that lump sum has your name on it. As an entrepreneur, hiring is one of the most important decisions you'll make.

But there's no need to stress because I have the secret to hiring quality professionals that are right for your team. It's LinkedIn. Linkedin jobs has the tools that will help you find your dream team faster and for free. And I know if you're running a small business or a solopreneur, there aren't enough hours in the day without having to go through the rigmarole of carefully crafting that perfect job description. Linkedin jobs has you covered there, too. There's an AI tool that helps you write a job description based on the position you're looking to fill. It truly doesn't get easier than that. And once you post the job, you'll be able to tap into LinkedIn's huge network of more than a billion professionals. Hiring is easy when you have that many quality candidates. So easy, in fact, that 86 % of small businesses get a qualified candidate within just 24 hours. So post your job for free at linkedin. Com/mnen. That's linkedin. Com/mnen, as in Money News Network. To post your job for free. Terms and conditions apply. Money Rehab is a production of Money News Network. I'm your host, Nicole Lappin. Money Rehab's executive producer is Morgan LaVoy.

Our researcher is Emily Holmes. Do you need some money rehab? And let's be honest, we all do. So email us your money questions moneyrehab@moneynewsnetwork. Com to potentially have your questions answered on the show or even have a one-on-one intervention with me. And follow us on Instagram at Money News and TikTok at Money News Network for exclusive video content. And lastly, thank you. No, seriously, thank you. Thank you for listening and for investing in yourself, which is the most important investment you can make.