I’m sure that many of you have seen some of the headlines about the settlement that the National Association of Realtors made in the ongoing lawsuits regarding buyer broker commissions. I would appreciate a few moments of your time to address this news and to share my professional opinion.

Some of the most prominent headlines have read: “The 6% commission on buying or selling a home is gone after Realtors association agrees to seismic settlement” (CNN) and “Powerful Realtor Group Agrees to Slash Commissions to Settle Lawsuits” (NYT).

Here’s the thing. The National Association of Realtors (NAR) has never set commissions, and it certainly never set them at 6%.

I spoke with a top COMPASS executive earlier this week. He informed me that they and other top brokerages have had meetings with the major news outlets to address these misleading headlines. He was told directly that CNN etc. knew that this information was presented falsely, however, they would not be updating the headlines because they also knew that this will get them clicks and sales. (While I shouldn’t be surprised that media outlets will publish whatever sells, the complete lack of journalistic integrity was still shocking to hear about!)

It is disheartening to see my industry attacked in this manner. I truly believe that a skilled real estate agent provides an invaluable service to the client, during the time that they are making the largest financial decisions of their lives. These changes that are being insisted upon are:

1. Unnecessary – the problem being addressed doesn’t actually exist. These commissions have always been and remain negotiable. Sellers have the choice to sell their own home, or with a flat fee broker, or to enlist the aid of a full-service brokerage.

2. Arbitrary – the net sales amount will usually work out the same regardless of how the payments work out on each side. If commission isn’t paid by the seller, then the buyer’s purchase offer might be a lower amount to compensate.

3. Harmful – directly to the groups of people who need our guidance the most. These changes will disproportionately affect the first-time homebuyer, a group already struggling in current conditions. The only individuals who stand to benefit from these changes are the attorneys who will make millions off the lawsuits.

That being said, this will actually change very little about the way my team operates, as we are always transparent about our commission structure. We work hard to provide a level of service that more than justifies our cost and that nets our clients more at the end of the day.

The Department of Justice wants to see these changes become law come July 15th:

• The MLS can no longer display buyer agent cooperative compensation (really just adding a layer of complication for us agents.)
• Buyers will have to sign a representation agreement before touring homes with their agent (right now, this form is usually signed later in the transaction.)

I would be happy to discuss the details about the future of the real estate industry with any of you and to share the un-sensationalized truth about these changes. Reach out anytime!