A lawsuit wants to change the way you pay your Realtors. What to know

globalnews.ca:

The buying and selling of homes in the United States could undergo massive changes this year — but what about in Canada?

The National Association of Realtors in the U.S. settled a US$418-million lawsuit, which means that the standard six per cent commission for Realtors could be on its way out.

With the spring housing market heating up, a Toronto law firm wants to see those changes come to Canada too, says Garth Myers with the Toronto-based law firm Kalloghlian Myers.

“We believe that the rules agreed to between real estate brokerages relating to the payment of commissions to buyer brokers were anti-competitive and inflated the price of these commissions and had a negative impact for seller of houses,” said Myers, whose firm has brought a proposed class-action lawsuit before the Federal Court to change the rules along similar lines in Canada.

Not everyone agrees that changes in Canada are needed, though, and the way commissions are handled has some big differences compared with the U.S.

Here’s what to know.

Earlier this month, the U.S. association agreed to do away with policies that for decades helped set agent commissions, moving to resolve lawsuits that claim the rules have forced people to pay artificially inflated costs to sell their homes.

As part of the settlement, the U.S. National Association of Realtors agreed to no longer require a broker advertising a home for sale on a Multiple Listing Service (MLS) to offer any upfront compensation to a buyer’s agent.

The rule change leaves it open for individual home sellers to negotiate such offers with a buyer’s agent outside of the MLS platforms, though the home seller’s broker has to disclose any such compensation arrangements.

The rule changes, which are set to take