A $418 million settlement calls for the Chicago-based National Association of Realtors (NAR) to eliminate decades-old rules on commissions and make it easier for buyers to negotiate fees with their own agents or use no agents at all, Reuters reports. The accord resolves claims against more than 1 million members, state and local realtor associations, and most smaller brokerages.

What’s In The Settlement?

The March 15 settlement comes after several years of litigation, including class-action suits from home sellers and a legal battle with the U.S. Justice Department. As part of the settlement, the realtor group agreed to prohibit offers to compensate the buyer’s agent on multiple listing services (MLS), a practice that critics say reduced price competition and led to inflated commissions and home prices.

NAR will also require buyer’s agents to enter written agreements with all clients, outlining their fees and services before moving forward with any work. According to experts, the settlement will usher in sweeping change for buyers, sellers and agents alike.

What Were the NAR Lawsuits About?

It’s a little complicated, but the basis of the recent NAR lawsuits boiled down to the group’s MLS cooperative compensation rule, which was introduced in the 1990s in response to calls from consumer protection advocates for buyer representation.

According to that rule, in order to list a for-sale property on an MLS – the databases agents use to share properties amongst themselves – they must offer a commission to the agent who ultimately brings in the winning buyer. Historically, this has resulted in a 5% to 6% total commission, with half going to the seller’s agent and half to the buyer’s agent.

Here’s the catch, though: The buyer doesn’t pay their agent’s fee directly. Instead, the commission is fully paid by the seller as part of their closing costs. According to the recently settled suit, as well as other litigation, this amounts to a form of antitrust, allegedly reducing competition and pushing up commissions higher than services warrant.

While NAR agreed to settle the suits against it, the group has made it clear it denies any wrongdoing in connection with its MLS or compensation rules.

What It Means for Buyers and Sellers

The rule changes, which are set to go into effect in mid-July, represent a major change to the way real estate agents have operated going back to the 1990s, and could lead to homebuyers and sellers negotiating lower agent commissions.

The settlement still needs court approval, but if that comes through, things could start to change in the real estate industry – and quickly. For one, buyers will need to start negotiating with their agents from the get-go. Regardless, it’s likely that fees and services will evolve gradually over time as the industry, agents and consumers adjust to the new normal.