{"id":6492,"date":"2025-05-05T07:34:03","date_gmt":"2025-05-05T11:34:03","guid":{"rendered":"https:\/\/www.deeds.com\/articles\/?p=6492"},"modified":"2025-05-05T07:34:07","modified_gmt":"2025-05-05T11:34:07","slug":"paying-the-agents-in-post-commission-times-buyers-finally-have-a-say","status":"publish","type":"post","link":"https:\/\/www.deeds.com\/articles\/paying-the-agents-in-post-commission-times-buyers-finally-have-a-say\/","title":{"rendered":"Paying the Agents: In \u201cPost-Commission\u201d Times, Buyers Finally Have a Say"},"content":{"rendered":"\n
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Last year, the National Association of REALTORS\u00ae (NAR) settled a major lawsuit and agreed to change the way agents get paid. Buyers now know they\u2019re covering their agents\u2019 commissions themselves.<\/p>\n\n\n\n

Once NAR agreed to new rules, as part of the $418 million lawsuit settlement, some people predicted a new wave of buyer-friendly competition among agents.<\/p>\n\n\n\n

Were the results as impactful as expected? How has the industry, and today\u2019s home buying experience, changed so far? Let\u2019s look.<\/p>\n\n\n\n\n\n\n\n

NAR Got Sued Because Sellers Were Exasperated<\/h2>\n\n\n\n

Traditionally, when homeowners have hired real estate agents to sell their homes, they would agree to cover both agents\u2019 commission \u2014 if they wanted their homes to get vital exposure through the multiple listing services (MLS).<\/p>\n\n\n\n

Normally, sellers would have to agree to pay the agents 5% to 6% of the value of the sale. Later, the listing agent and buyer\u2019s agent would split that sum out of the sale proceeds.<\/p>\n\n\n\n

Sellers sued because they didn\u2019t want to keep paying for buyers\u2019 agents. That said, the buyer winds up paying for everything in the end. But should the agents\u2019 cut just be assumed and imposed on the parties? The seller would have to account for the commission money when setting the price in the first place, so that became part of the high cost of a home sale.<\/p>\n\n\n\n

Perhaps the biggest change resulting from the lawsuit is a new level of transparency, especially on the buyer\u2019s side. Today, both sides know exactly how their agents are paid. Agents will no longer split commissions without their clients\u2019 permission. The prospective buyer signs a contract with their agent showing fees \u2014 before the agent can start showing the client homes.<\/p>\n\n\n\n

Before the lawsuit, the precise breakdown of the fee-splitting arrangement was only visible to the agents on their MLS databases. Critics of this system called it collusion. They slammed real estate brokerages for keeping fees propped up, behind the scenes. And why, they insisted, are the costs so high? Fees haven\u2019t gone down at all in the 21st<\/sup> century, even though transaction costs have eased in the computer age.   <\/p>\n\n\n\n

So, Are Agents\u2019 Fees Any Lower Now?<\/h2>\n\n\n\n
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The NAR lawsuit settlement does not lower fees. It doesn\u2019t cap fees. It simply bars sellers\u2019 agents from listing buyers’ agent commissions on MLS databases. (To be clear: The agents on the two sides of a transaction may still agree on fee amounts. A seller may still offer to cover the fee of a prospective buyer\u2019s agent. Many do, to boost their listings. But this agreement may not <\/em>be made through the MLS.)  <\/p>\n\n\n\n

Commissions for buyers\u2019 agents have dropped since the new rule came out last year. Nothing jaw-dropping to see here, though. A recent report from Redfin shows the average buyer\u2019s agent commission at 2.37%.<\/p>\n\n\n\n

The process of change is still unfolding. Many of today\u2019s buyers have read about the commission lawsuit. They know that their sellers aren\u2019t committed in advance to paying a set amount to cover all agent costs. And they know to shop for agents and negotiate before signing any contracts.<\/p>\n\n\n\n

So, today\u2019s buyers and their agents negotiate the fees (which is something they could always do \u2014 but now they know it). And yes, this can lower the overall cost of buying a home. But only if buyers get proactive and actually do keep their negotiation power in mind.<\/p>\n\n\n\n

So it seems the change is happening gradually, not abruptly. The more buyers grasp how their buyer agents are paid, the more negotiating goes on, and the better deals they\u2019ll get. Knowledge really is power.<\/p>\n\n\n\n

Agents Who Aren\u2019t on Board?<\/h2>\n\n\n\n

A recent article in the New York Times<\/em> quotes a former agent who recently interviewed several brokers to help her sell a home. This Oregon home seller found them \u201cskirting the new rule\u201d \u2014 pressing her to cover both agents\u2019 fees. Negotiation? No way!<\/p>\n\n\n\n

The Times<\/em> also discusses a homeowner in Pittsburgh, who knew about the new rule and asked his agent if he might sell his home without having to pay the buyer\u2019s agent. His agent said no, basically. Sellers miss out on buyers, he was told, if they aren\u2019t prepared up front to cover both agents\u2019 fees.<\/p>\n\n\n\n

Another seller echoed that experience. The seller was directed to agree to a 3% commission for the buyer\u2019s agent. Or else! If the seller declined, said the seller\u2019s agent, no buyers would be brought to the open house. <\/p>\n\n\n\n

It looks like some agents out there are not interested in adapting to the new legal framework. And so, in various places, the sellers\u2019 struggle continues.<\/p>\n\n\n\n

More Buyers Without Agents?<\/h2>\n\n\n\n

After NAR settled the case, some market watchers thought buyers would shift strategies completely. Now that they knew they were ultimately covering commissions through their offers, would some buyers just refuse to use agents at all?<\/p>\n\n\n\n

That, too, could occur gradually. Brokerages that deal with an unrepresented buyer might ask for a slightly smaller overall fee. Total fees for real estate firms would shrink by a certain amount, then. But not by a lot. Because selling or buying without an agent is hard work. Going unrepresented just to save the cost of one agent\u2019s commission probably won\u2019t be worth it for most people.<\/p>\n\n\n\n

Alternatively, more buyers and sellers could be moved to seek out the no-frills real estate firms that charge flat fees, or take no more than some 1.5% of a home\u2019s sale price.<\/p>\n\n\n\n

If you\u2019re thinking of going it alone or deep-discount, consider these points:<\/p>\n\n\n\n