The National Association of Realtors has agreed to pay $418M in damages over four years to settle lawsuits against it by home sellers who argued that the organization's longstanding rules on broker commissions resulted in excessive fees.

NAR also agreed to put an end to the rules, which allowed real estate agents to enjoy some of the highest commissions in the world.

“This will blow up the market and would force a new business model,” Norm Miller, a professor emeritus of real estate at the University of San Diego, told The New York Times, which reported that Americans pay roughly $100B in real estate commissions every year.

The organization denies any wrongdoing in connection with the model, which it calls the multiple listing service cooperative compensation model rule and dates to the 1990s. The upshot of the rule was a standard 6% commission paid by home sellers, which is often split with buyers' agents.

Commissions in other countries tend to be lower than in the United States, such as 1% or 2% in the UK and 3% or so in other European countries, though some are higher. Often in those countries, a value-added tax is also attached to the commission.

The settlement must receive court approval before it goes into effect. A federal jury found late last year that the organization and several large residential brokers conspired to inflate commissions. The jury awarded $1.8B in damages.

If the settlement is approved, homebuyers would be able to negotiate fees with real estate agents or not use an agent at all, which would presumably depress the amount that agents make. Under the current system, such negotiations were generally unsuccessful, and often buyers' agents would steer their clients away from properties with lower commissions, according to research published by the University of Southern California.

NAR declined to comment on the settlement on Friday beyond its published statement.