The Media Missed the Mark on This.

Have you read the headlines “How Buying Homes is About to Change?” or “Home Sellers Win $1.8 Billion After Jury Finds Conspiracy Among Realtors?”  These headlines are reporting on a judgement against the National Association of Realtors (NAR) and some brokerages for conspiring to artificially inflate agent commissions.  Let me first say, there are several appeals and it could take years for the dust to settle on this particular lawsuit, so it’s way to early to make bold assumptions on how the industry will change.  It has created a few changes in the Greater Seattle Market though, but not quite what was predicted.

I can’t speak to what happens in every real estate market in the country, maybe there are places that sellers weren’t aware their total commission paid were being split with the buyer’s agent.  Maybe there are also markets where sellers weren’t aware they have a choice on the commission they pay.  That’s not our market.

• In 2019, the Northwest MLS removed the requirement that a seller list with an offer to buyer’s agent commission. Nothing changed, sellers still offered the commission to the buyer’s agent.
• In 2023, the Northwest MLS made some changes to the Seller’s Listing Agreements (that all licensed agents in WA are required to complete with sellers) specifically spelling out how much total commission will be paid by the seller and what amount is for the listing firm and what amount for the buyer’s agent’s firm. The media reported this would create a huge change!  Nothing changed.
• In 2024, the Northwest MLS again made a few changes to support transparency, this time requiring a Buyer Brokerage Service Agreement. (that all licensed agents in WA are now required to have their buyers sign).  This is the agreement between a buyer and their agent on how the agent will be paid if the seller doesn’t offer a commission.  Again, two months into 2024 and nothing changed.

Why you ask? Commissions are ultimately built into the price, one way or another, of what that home is going to be sold for.  If the seller offers a commission to the buyer’s agent, their net profit is reduced by that amount.  But the story doesn’t stop there.

• The Buyer’s Broker Service Agreement allows for the buyer’s agent to not be required to even show a house with no commission offered, which is NOT in the best interest of the seller. The more people that see a home for sale, the more it will sell for, don’t cut out your buyer’s pool.
• The biggest obstacle for buyers is affordability by a long shot. It’s difficult enough for buyers to afford the down payments, closing costs, high taxes, and monthly mortgages as it is.  If they are asked to pay commissions to their agent, that money comes from somewhere, and ultimately it will be what they can offer for the home.  This will also reduce the net profit to the seller, just the same as if they had paid the commission in the first place. 😊

My advice, don’t listen to the national media about this and make sure you have an agent you can trust and who brings you value for the commissions being paid.  It really does make a difference.