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Real Estate Industry Update
Dated: December 8 2023
October 31, 2023 proved to be scary for the residential real estate market with the judgment against the National Association of REALTORS® and their co-defendants. But like most scary things, sunlight and information helps alleviate fear.
The anti-trust lawsuit claimed that brokers harmed consumers by taking away fair competition by fixing how and what commissions were being charged. While this judgment just came down on Halloween, appeals are already in motion so the final outcome is still in question. Regardless, more transparency about commission and changes to best practices are coming and that is a good thing for consumers and agents alike.
What do buyers and sellers need to know as a result of the verdict? The first thing, which has always been true, is that commission is negotiable. There is not a fixed amount that is charged. It doesn’t mean that any particular agent will work for any particular fee, it just means both parties can try to negotiate more favorable fees and terms.
The second thing is “traditionally” all commission has been paid by the seller to the listing brokerage with the sellers’ express permission/direction to share a portion of that commission with the buyers’ brokerage. For example: The seller pays the listing brokerage 6% of the sales price as commission and directs their agent to share half of that 6%, or 3% of the sales price, with the broker who represents the buyer in the transaction. Currently, most local realtor associations require buyer agent compensation to be offered to list a home for sale on the Multiple Listing Service. The lawsuit calls into question this “tradition,” claiming that sellers were not given competitive choices regarding paying the buyers’ broker.
Going forward, for both sellers and buyers, there will be more transparency and more competition. Sellers will have more options, which is good. Buyers may have more hurdles and questions, which may or may not be good. Either way, both will benefit from the experience and wisdom of a qualified real estate professional as they learn and contend with these changes.
We will address strategies for both sellers and buyers in navigating this new landscape in future posts as it further develops. In the meantime, contact us with any questions you have about your particular situation.
Email: email@example.comHutchens Hamalian Properties Group is one of Dudum Real Estate's top Lamorinda teams. The Lafayette-based partnership focuses on real estate services in central Contra C....