VOLUME 42 • NUMBER 17 • MARCH 21, 2024
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UPHEAVAL
6?4 2 REAL ESTATE
5 3 %
Will the realtors’ settlement lower costs for consumers?
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flat rate
BY FREDA MIKLIN STAFF WRITER
We have been getting lots of questions from our readers about what the much-publicized settlement agreed to by the National Association of Realtors (NAR) to “end litigation of claims brought on
behalf of home sellers related to broker commissions,” will mean to them as home buyers and/or sellers. Real estate commissions were historically six percent, paid by the seller. That amount has always been negotiable, a fact not known or well understood by the majority of buyers and sellers because the industry applied subtle but consis-
tent pressure to maintain it. In October, a jury found NAR guilty of colluding to keep home sales commissions artificially high and ordered the trade organization to pay $1.8 billion in damages to affected victims. Negotiated commission rates have become more common in recent years, especially in high-priced homes, as prices
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or less?
have escalated precipitously. What has been confusing for some people is that real estate agents who worked for home buyers were paid by home sellers, causing what could be perceived as potentially inconsistent loyalties. For example, a seller’s real estate agent could negotiate his or her fee, traditionally 3.2% out of the six percent total,
when they agreed to list the seller’s property in the Multiple Listing Service (MLS) for sale, but buyers’ real estate agents had no similar ability to negotiate with the seller because they are unknown when a property is listed. Thus, buyers’ agents’ commissions, which were traditionally the remaining 2.8% Continued on page 6