- SUMMARY
A groundbreaking settlement between the National Association of Realtors (NAR) and homeowners in Illinois and Missouri is revolutionizing the real estate industry.
The settlement, which is expected to be approved by a federal court, addresses allegations of anti-competitive practices that have artificially inflated real estate commissions.
Currently, home sellers pay a 5-6% commission to their listing agent, who then splits it with the buyer’s agent.
This non-negotiable commission structure has been eliminated under the settlement, giving buyers and sellers more flexibility and potential savings.
For sellers, this change offers the opportunity to negotiate their commission with their agent, possibly reducing it to 3% instead of 6%.
This could result in substantial savings, especially in higher-priced markets.
For example, a $25,000 commission under the old rules could now be reduced to $12,500, saving sellers tens of thousands of dollars.
Buyers, however, will likely need to consider paying a commission to their agent, which was previously covered by the seller.
Flat fees or hourly rates may become more common as buyers seek to mitigate expenses.
While buyers may have less buying power due to the additional agent fees, the settlement also presents opportunities.
Open house websites and technology advancements allow buyers to view properties independently, potentially reducing the agent’s role.
Buyers can also negotiate flat fees to cover specific services, such as writing an offer and providing legal assistance.
Overall, the settlement represents a significant shift in the real estate industry.
It empowers buyers and sellers to negotiate more favorable terms, potentially saving them money and giving them more control over the homebuying and selling process.
- Key Takeaways
Commission structure becomes negotiable
Sellers now have the flexibility to negotiate commissions with their agents, potentially reducing costs by up to half
Potential savings for sellers
In the example provided, a seller can save $12,500 by negotiating a 3% commission on a $250,000 home sale
Changing role of buyer’s agents
Buyers may need to pay for agent services, but technology advancements and flat fees offer ways to mitigate expenses