You know that insane commission rate real estate agents charge you when you buy or sell your home? Yea, that’s going to change big time now!
The NAR, or National Association of Realtors, agreed to settle with a group of homesellers in this historic landmark antitrust lawsuit by paying $418 million in damages, and best of all eliminating rules on the commissions they charge.
According to an article on CNN “The agreement effectively will destroy the current homebuying and selling business model, in which sellers pay both their broker and a buyer’s broker, which critics say have driven housing prices artificially higher.”
The settlement will result in major changes to how real estate agents conduct business with home buyers and sellers, including:
1) It will prohibit agents’ compensation from being included on listings placed on local centralized listing portals known as MLS.
2) It will end requirements that brokers must subscribe to MLSs that may be owned by subsidiaries of the National Association of Realtors.
3) It will require buyers’ brokers to enter into written agreements with their buyers.
How much can home buyers and sellers expect to see real estate commissions drop by?
Some estimates put the expected drop in real estate commissions 25% to 50% down from where they are today. The national average real estate commission in 2023 was 5.49 percent, so a reduction by 25% could bring that down to 4.11 percent, and a 50% drop could bring it down to 2.74 percent.
I’m sure a lot of us would take that real estate commission and run, but keep in mind this now opens up the commission discussion and makes is a matter of negotiation between you and your real estate agent.