Over the past few months, extensive media coverage has focused on the class action lawsuit lodged against the National Association of REALTORS® (NAR) and other major real estate conglomerates. These articles aim to convey the notion that this legal action will revolutionize the real estate landscape entirely. However, I believe its potential for significant change is limited.
Historically, buyer’s agents have received compensation through the cooperative commission established between the seller and their agent. For example, the seller and their agent may agree on a commission of 6% with 2.8% slotted for the agent representing the buyer. Many real estate brokerages mandated that the listing agent pay a minimum amount to the buyer's agent, thereby impinging upon the sellers' freedom of choice and negotiation. Following the lawsuit, it was determined that the seller’s agents are not obligated to remunerate the buyer's agent from their own commission. As of this writing, listing agents do not have to advertise a buyer’s commission at all.
Contrary to popular belief, this does not mean that buyer's agents will disappear or will now have to work for free. Instead, this lawsuit strips real estate brokerages of the right to mandate a minimum commission, allowing selling agents to offer as much or as little to a buyer's agent as they desire. Personally, I'll continue to offer a competitive commission to buyer’s agents on all of my listings, as they bring the most essential element—the buyer. With prices continuing to rise and inventory low, buyer's agents are crucial for ensuring successful real estate transactions. Time will tell how this will ultimately affect the market. If you have any questions, please feel free to reach out to me. I am always happy to help!
