Critics of that model say it means both agents are essentially working for the seller, creating a potential conflict of interest for the buyer’s agent. What’s more, the seller’s agent is required by NAR to disclose the exact commission rate to the buyer’s agent on NAR’s homes-listing websites—aka multiple- listing services, or MLS—but the rate isn’t known by buyers. In other words, unbeknownst to the buyer, their agent may be incentivized to steer them toward purchasing homes with the highest commission rates—and bigger agent payday. Further muddying the waters is the reality that commission fees are often reflected in the sales price for the home. Thus buyers, in effect, are typically paying some, maybe even all, of the commissions via an inflated price above the true value of the home—no doubt one of many factors in the skyrocketing housing prices of recent years.
The National Association of Realtors was found liable for $1.8 billion by a federal jury last November.
their sales price, potentially saving tens of thousands of dollars. Of course, a buyer’s agent will then need to be paid by the buyer—but it’s unclear if a single model will be adopted as a norm or various methods will come into play, such as a
When the commission-rule changes take effect in July— assuming the settlement is approved by the court—sellers will no longer be expected to pay a commission to the buyer’s agent, allowing them to keep several percentages more of
38 NorthBaybiz
April 2024
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