Settlement may give online Realtors access to more listings

WASHINGTON (CNN) -- Home buyers could save an average of more than $2,000 under a settlement with the National Association of Realtors announced Tuesday by the Justice Department.

The proposed settlement ends the industry's anti-competition rules barring online brokers from viewing more than 800 multiple listing services nationwide affiliated with the National Association of Realtors.

The settlement, which must be approved by a court, means brokers will likely demand lower commissions because they don't have to conduct brick-and-mortar business, like driving interested buyers to homes. The cost savings could be passed onto the consumer.

"Consumers should be able to save up to 1 percent of the price of a home," said Deborah Garza, deputy assistant attorney general of the Antitrust Division. She bases the percentage on the typical discount an online broker currently offers.

Citing 2006 figures, Garza said the median price of a home in the United States was $225,334. So, a drop of 1 percent in a Realtor's commission would be $2,253.

"When there is unfettered competition from brokers with innovative and efficient approaches to the residential real estate market, consumers are likely to receive better services and pay lower commission rates," Garza said.

Under the deal, the National Association of Realtors agrees to change its rules and require its 800 affiliated local Multiple Listing Services to repeal their rules as well.

The government said the deal guarantees that Internet-based real estate companies will not be treated differently than traditional brokers. Antitrust officials said that under the new policy, traditional agents will not be permitted to withhold their listing from agents who serve their customers through virtual office Web sites.

National Association of Realtors President Richard Gaylord called the settlement "a win-win for the real estate industry and the consumers we serve."

"The final order expressly provides that NAR does not admit any liability or wrongdoing and will make no payments in connection with the settlement," Gaylord said.

He termed the settlement a compromise, but Garza disagreed.

"I wouldn't call it a compromise," Garza said. "We got the full relief we were seeking."

The settlement was announced by the Antitrust Division, which filed suit in 2005 against the industry group, claiming that its rules prevented brokers who offered online discount services from fully participating in the listing service.

Billions of dollars were at stake in the legal battle: In 2006, $93 billion was spent on brokerage services, with the media commission paid for a home sale just over $11,000.

The agreement must be approved by the federal judge in Chicago, Illinois, who had been set to hear the case in July. Officials said they expect the settlement to be approved by the court this summer.