The 6% Commission On Buying or Selling A Home Is Gone

The National Association of Realtors has reached a nationwide settlement of claims that the industry conspired to keep agent commissions high, it said Friday, a deal set to usher in the biggest changes to how Americans buy and sell homes in decades.

The $418 million agreement will make it easier for home buyers to negotiate fees with their own agents and could lead more buyers to forgo using agents altogether, which has the potential to drive down commission rates and force hundreds of thousands of agents out of the industry.

NAR agreed to abandon longstanding industry rules that have required most home-sale listings to include an upfront offer telling buyers’ agents how much they will get paid. Under a system in place for a generation, sellers have typically set buyers’ agents fees. Consumer advocates say the arrangement has prevented buyers from negotiating to save money and kept commissions in the U.S. higher than in most of the world.

The changes also require many real-estate agents that work with buyers to sign agreements with their clients about what services they will provide and how much they will be paid.

If fewer buyers use their own agents, that could push some agents out of the industry and lead to a decline in NAR’s membership.

Going forward, sellers can still offer to compensate buyers’ agents, but in most markets they won’t be able to put those offers in the home listing. If buyers don’t want to pay for their agents out of pocket, they could ask for the seller to cover the cost of the buyer’s agent.

Sellers are less likely to agree to that in a hot housing market, however.