-
Realtor® commissions have always been negotiable between brokers and consumers. The National Association of Realtors® does not set commissions. As such, there is no “standard, non-negotiable fee”—6% or otherwise—set by the National Association of Realtors®.
-
Realtors® are not becoming obsolete. Consumers will continue to need the expertise of Realtors® after the ruling. To suggest that consumers will suddenly want to go it alone in the complex home buying/selling process is unlikely. Speaking of home buying, the rule changes stemming from the settlement are likely to make things harder, not easier, on buyers—especially first-time buyers, low-income buyers, minority home buyers, and potentially veteran buyers who choose to utilize the VA loan program. A Realtor’s®negotiation skills, knowledge of local markets, familiarity with legal contracts, and understanding of the financial complexities of real estate transactions will continue to be critical services sought out by consumers. Further, unrepresented buyers pose a greater legal risk because there’s so much that goes into understanding a real estate transaction—this is just one of the many reasons buyer representation is extremely valuable.
-
The settlement ruling won’t bring home prices down and it won’t solve the housing affordability crisis. Just like virtually every other market, home prices are tied to supply and demand. In Minnesota, like most of the country, we have a housing deficit and pent-up demand. In short, the housing market is doing what markets do. Until we see greater supply, home prices are likely to continue rising. Further, the notion that sellers are suddenly going to believe their home is worth 2–3% less post-settlement than they did previously is simply untrue. Additionally, housing affordability has declined in recent months due in part to inflation and higher-interest rates.
-
Commissions for buyers’ agents are not going away. Buyers’ agents will not be working for free. While offers of cooperating compensation will no longer be listed on the MLS after the new ruling goes into effect, cooperating compensation itself will still be permitted. Further, seller concessions will also continue to be allowed. Is it possible that some agents might decide to lower their fees? Certainly, and it’s worth noting that there have always been discount brokerages available to consumers. On the flip side, top-notch Realtors®, who excel at communicating and offering high-quality value to clients, could decide to charge more for their services.
-
Cooperating compensation can still be offered by the seller. Listing brokers and sellers can continue to offer compensation for buyer broker services, but such offers could not be communicated via the MLS upon the rule change. Cooperating compensation will remain a viable option for home sellers and buyers. Brokers and agents will need to reinforce the importance of transparency and work diligently to keep their clients informed about their options, compensation, and the transaction process.