This weekend marked what is being called the next big “paradigm shift” in the real estate world. After countless hours of meetings, classes, and research over the past year or more, my team and I are ready to confidently guide you through the new process. 🙌

First, some background: within recent memory, we can point to two prior events that changed the way the industry functions nationally.

The first was in the early 1990’s, when buyer agency was created by statute law. Before that, brokers represented only sellers. If buyers worked with an agent to find a house, then that agent would act as a sub-agent of the listing agent. Their fiduciary duty (both agents!) was then owed to the sellers, leaving buyers unrepresented and therefore disadvantaged. 

The second was due to changing technology. All home listings used to be printed in books that were distributed to agents’ offices every few weeks. As the internet began taking the place of print media in the late 90s and early 2000s, these books were phased out (just before I started in 2005 – lucky me! 😆)

Both changes were followed by rumors that real estate agents would be made obsolete – who needs an agent with their listing book when all the listings are online? Turns out, agents do a lot more than open a book (or a door) and we are still here providing a valuable service to our communities. 

The MLS books were just a casualty of advances in technology. This happens all the time, in all industries. The creation of buyer agency, however, was an intentional attempt to balance an unfair process – a process that has a huge effect on a person’s standard of living. 

Now, a series of lawsuits has forced the industry to change in ways that will likely reintroduce those disadvantages for buyers versus sellers. This could further the gap between the “haves” and the “have nots”, undermining our essential middle class and making it harder for a first-time buyer to achieve the American Dream. 

I could go on about the reasons that I think these lawsuits took place (and I have!) But to summarize, high-powered attorneys took advantage of the public’s misperceptions about how the real estate world functions, how agents get paid, and the value that we provide to our clients. I fully admit, agents are guilty of feeding these misperceptions, when we talk about selling a house in one day, without addressing the weeks/months of preparation and the years of expertise that went into that one day on the market. Shows like Selling Sunset and Million Dollar Listing do not help! 🙄

However. The average full-time agent in IL makes $50k-75k a year. The team of attorneys who prosecuted the $1.8 billion dollar class action settlement stand to receive an estimated $600 million of it, while each of the individual home sellers will receive less than $100. I’ve seen estimates as low as $11 each. We are not the ones who are overpaid. 

You might have heard that these lawsuits mean that agents’ commissions are now negotiable and not set by law. This is misleading, as these commissions have always been negotiable. There are “flat-fee” agents who will do the bare minimum of putting your listing in the MLS, and route all calls to you. Then, there are the full-service agents who do so much more and appropriately charge more – like most any other industry.

The actual changes boil down to these two points: 

• The MLS no longer displays buyer agent cooperative commission. We can still post this information on our sites and in the home itself. 
• Buyers will have to sign a representation agreement before touring homes with an agent (right now, this form is often signed later in the process.)

Practically, I don’t foresee much actually changing. Commission will become another line item to be negotiated, with the buyer and seller reaching an agreement on who pays whom. If a seller is not offering cooperating commission, then they might expect to see offers come in at a slightly lower price, as buyers must make up the difference to pay their agents (it shouldn’t surprise anyone that most of us cannot afford to work for free.) It’s a “six in one hand, half-dozen in the other” scenario. 🤷🏻‍♀️

It is difficult to see the profession that I have poured myself into, the profession that I truly believe provides valuable resources during some of the most difficult times in people’s lives, disparaged so regularly. However, I know that this is my and my team’s opportunity to shine. Our dedication and expertise will serve us well as we continue to support you! 

Thank you for hearing me out through all that. And thank you to all our loyal clients, business partners, friends, neighbors, and of course our families, who allow us to keep doing this crazy job we love! 🥰

– Alice & Team