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Effects of the Recent National Association of Realtors Ruling
NYC-based boutique law firm Pardalis & Nohavicka brings the latest legal updates from the world of real estate. Pardalis & Nohavicka handles an eclectic array of matters, representing individuals and business owners in civil litigation, criminal cases and business transactions, currently litigating and representing clients throughout the United States and around the world. The recent ruling involving the National Association of Realtors (NAR) is expected to have implications for real estate buyers, sellers and members of the Real Estate Board of New York (REBNY). Keep reading to find out what these groups can expect in the aftermath of this ruling. Background The NAR settlement stems from a 2019 lawsuit filed by a group of Missouri home-sellers alleging antitrust violations. In it, they claimed that the NAR’s practices inflated real estate commissions, particularly through rules requiring the listing of commission offers on Multiple Listing Services (MLSs). The plaintiffs argued that these practices incentivized buyer agents to favor properties with higher commissions, ultimately harming consumers. On March 15, 2024, NAR agreed to a settlement of $418 million and to the following provisions: Prohibit commission offers on MLSs: NAR must prohibit buyer agents from listing commissions on the MLS, thereby allowing consumers to negotiate commissions directly with agents. Require written agreements for buyer representation: Buyer agents will be required to enter into written agreements with clients before showing homes to ensure transparency about services and fees. Notably, sellers can still offer compensation off of MLSs, and buyer concessions for closing costs will continue to be allowed on MLSs. These changes went into effect on August 17, 2024. Notably, the settlement does not directly affect the amount that real estate agents earn in commissions, but instead focuses on transparency and consumer negotiation. Impact on REBNY Members Changes in Commission Practices: REBNY members — especially brokers and agents — will need to adapt their business practices. This includes updating contracts, disclosures, and marketing materials, while also reevaluating how they disclose commission arrangements and structure their services and fees. Increased Competition: The ruling may lead to heightened competition among brokers as buyers and sellers become more aware of commission structures and seek more cost-effective or transparent options. To stay competitive, REBNY members may need to distinguish themselves by offering better service, market knowledge or alternative commission models. Impact on Buyers & Sellers of Property in New York Greater Transparency in Commission Payments: The NAR ruling is expected to lead to greater transparency around real estate commissions. Specifically, buyers can expect clearer disclosures regarding who is responsible for paying the broker’s commission. Historically, sellers paid both the listing agent’s and the buyer’s agent’s commissions with buyers indirectly covering the cost through the sale price. However, going forward, there may be more upfront discussions about commissions, which could give buyers more leverage to negotiate these fees. Potential Reduction in Buyer Costs: With increased transparency, there will likely be downward pressure on commission rates, potentially leading to lower overall costs for buyers. Accordingly, as agents compete, buyers may benefit from reduced commissions. Potential Unintended Consequences: The increased ability to negotiate commissions could lead to more confusion and create additional friction in transactions. For example, before the ruling, commission structures typically followed standard practices, which allowed both parties to focus more on the overall sale price, rather than the specifics of the commission. Different Structure, Same Pricing Decisions: The NAR ruling may not have a material effect on New York’s real estate market, which could largely continue operating as it has been. Because real estate transactions are often complex, buyers and sellers typically rely on knowledgeable agents to guide them through the process. As a result, commissions may largely remain the same, whether paid by the buyer or seller. While the payment structure may change, these costs will still be factored into the final purchase price. At the same time, sellers will continue to focus on their net returns after deducting all costs, while buyers will focus on affordability and their own closing costs. Conclusions Overall, the NAR ruling is expected to encourage a more competitive housing market, resulting in a net benefit to the buyers. That said, the full effect of the settlement remains uncertain, and there is some skepticism about whether it will meaningfully reduce costs for homebuyers. About John Pak serves as the Real Estate Chair at the Law Offices of Pardalis & Nohavicka. He is a transactional attorney specializing in acquisitions, dispositions and leasing. A graduate of Brooklyn Law School, he received his BA in Political Science from New York University. Prior to joining PN Lawyers, John owned his own private law practice for 15 years and a title company for 6 years.
Read moreWhy Staten Island is the Perfect Place to Buy Your Next Home
When it comes to real estate in New York City, many people immediately think of Manhattan’s high-rises or Brooklyn’s hip neighborhoods. But savvy buyers are increasingly turning their attention to Staten Island—and for good reason. Whether you're a first-time homebuyer or looking to upgrade, Staten Island offers unique advantages that make it the perfect place to invest in your next home. 1. Affordability Meets Space Compared to the other boroughs, Staten Island offers more bang for your buck. You can find homes with larger lots, extra bedrooms, and spacious yards—all at a price point that’s significantly more affordable than what you’d pay across the harbor. If you're searching for space without sacrificing your budget, Staten Island is the ideal option. 2. A Variety of Neighborhoods to Suit Your Lifestyle Staten Island boasts a wide range of neighborhoods, each with its own unique character and charm. From the suburban feel of Tottenville and Great Kills to the more urban, waterfront vibe of St. George, there’s truly something for everyone. Families: If you’re looking for a family-friendly environment, neighborhoods like Richmondtown and Westerleigh offer quiet streets, good schools, and a strong sense of community. Commuters: For those who need quick access to Manhattan, St. George offers excellent ferry connections and stunning views of the skyline. It's an up-and-coming neighborhood, with a growing number of condos and developments perfect for professionals. Nature Lovers: Staten Island has more parks than any other borough. Explore Greenbelt Park, enjoy the beaches along the South Shore, or take a relaxing stroll through Clove Lakes Park. 3. Staten Island's Growing Market The Staten Island real estate market has steadily grown, making it a prime spot for real estate investment. Whether you’re buying your forever home or looking for rental properties, the borough offers opportunities for both homeowners and investors. Demand for housing is increasing as more people recognize Staten Island as a great place to live, so investing now could pay off in the future. 4. A Strong Sense of Community What makes Staten Island stand out is its strong community feel. The borough is known for its friendly neighborhoods, local businesses, and vibrant cultural scenes. Many Staten Island residents have lived here for generations, contributing to its close-knit, family-oriented environment. From local events like the annual Staten Island Oktoberfest (which helps support veterans) to thriving local dining and shopping options, there’s a real sense of belonging here. 5. Potential for Seller Financing For buyers worried about traditional financing options, Staten Island’s real estate market often provides opportunities for seller financing. With this flexible financing arrangement, buyers can negotiate terms directly with the seller, potentially bypassing banks and saving on costs. It’s just another way Staten Island sets itself apart when it comes to making homeownership more accessible. Conclusion: Staten Island—Your Next Home With its affordability, spacious homes, diverse neighborhoods, and growing market, Staten Island is a hidden gem in the New York real estate market. If you're looking for expert guidance on buying or selling property, Christine DeHart at Salmon Real Estate can help you navigate the local market with ease.
Read moreStaten Island Real Estate Market: Fall 2024 Update
As we move into the fall of 2024, Staten Island’s real estate market continues to be one of the most dynamic and unique in New York City. Known for its suburban feel, green spaces, and strong sense of community, Staten Island has seen significant trends that reflect both broader national patterns and localized factors influencing housing here on the island. Here’s a look at some key developments in Staten Island's real estate market today: 1. Interest Rates Impacting Buyers Interest rates remain a critical factor shaping homebuying decisions. Throughout 2024, mortgage rates have stayed higher compared to previous years, leading to more cautious buyers. While this has slowed the overall volume of transactions, it hasn't completely deterred the demand for homes. Buyers looking to move from other boroughs or neighboring New Jersey continue to view Staten Island as a more affordable and desirable place to live, especially for families seeking space, backyards, and good schools. 2. Inventory Levels Staten Island's housing inventory remains tight. Many homeowners who refinanced their mortgages during the period of historically low rates are hesitant to sell and lose their favorable rates. This has resulted in limited listings, particularly in high-demand neighborhoods like Tottenville, Westerleigh, and Richmondtown. As a result, prices have remained steady, with modest appreciation despite the interest rate environment. 3. Home Values Holding Strong Despite a national slowdown in housing markets, Staten Island has largely bucked the trend. Average home prices on Staten Island have seen a slight increase year over year. According to recent data, single-family homes have experienced the highest demand, with the average price hovering around $700,000. This is partly due to the island’s suburban appeal and the growing number of buyers who prefer owning a detached home rather than living in a condominium or co-op in Manhattan or Brooklyn. 4. The Rental Market The rental market on Staten Island is also evolving. With higher mortgage rates keeping some potential buyers on the sidelines, demand for rental properties has increased. This is particularly evident in neighborhoods near the ferry and transit hubs, such as St. George and Tompkinsville. Renters, including young professionals and families, are attracted to Staten Island's lower rental rates compared to the rest of the city, while still being relatively close to Manhattan. 5. Luxury Market and New Developments Staten Island's luxury market continues to see interest, particularly in areas like Todt Hill and Emerson Hill. High-end buyers appreciate the privacy, larger lot sizes, and custom-built homes that these neighborhoods offer. Additionally, new developments are sprouting up across the island. Mixed-use buildings and new condominium complexes, particularly near the North Shore waterfront, are contributing to the island's growing appeal to both investors and first-time homebuyers. 6. The Rise of First-Time Homebuyers The island has seen a steady influx of first-time homebuyers, many of whom are millennials. Staten Island's combination of relatively affordable housing, strong community vibe, and proximity to both urban amenities and nature makes it an attractive option. The availability of FHA loans and state-backed assistance programs has helped this demographic enter the market, even with current financial challenges. 7. Sustainability and Green Spaces Sustainability continues to be a growing trend in Staten Island real estate. Buyers are increasingly prioritizing homes with energy-efficient features, such as solar panels and updated insulation, which provide long-term savings. Staten Island’s abundance of parks and green spaces, such as Clove Lakes Park and the Greenbelt, also makes it a desirable place for those seeking outdoor recreational activities and a healthier lifestyle. Outlook for 2025 Looking ahead, Staten Island's real estate market is expected to remain stable but competitive. We could see a shift if mortgage rates decrease, potentially unlocking a new wave of sellers and buyers. However, for now, demand is likely to outpace supply, particularly in sought-after neighborhoods, keeping prices resilient. Whether you’re a buyer, seller, or investor, the Staten Island real estate market offers plenty of opportunities—especially for those who can navigate its unique landscape. If you're considering buying or selling in Staten Island, working with a local expert who understands the nuances of this market is key to making the most informed decisions. Christine DeHart, Broker/Owner, Salmon Real Estate
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