Commission Settlement - What Happens Now?

This is the current structure:   

-Commissions have ALWAYS been negotiable. There is no set nationwide commission rate because it is illegal under the current anti-trust laws. 

-Every brokerage is free to set their own commission fee. 

-Any agreed upon commission fee is determined by the seller and listing agent at the time of the listing appointment. 

-When a seller agrees to pay a listing agent a pre-determined commission, the listing agent generally offers a portion of the agreed upon commission to a buyers agent. What’s the purpose of this? This is what is known as sub-agency. Basically the listing agent is sub-contracting to buyer agents. Buyers agents will bring in the buyer and represent them and their interests. Listing agents will represent the seller and the sellers interests. This is beneficial to both parties.   

What the settlement does not do?   

It does not lower commission rates as commission are negotiable. Brokerages are still free to charge a fee they feel is conducive to their business.   

What does the settlement mean?   

Buyers: 

Buyers will need to have a written Buyer-Broker Agreement with an agent to be shown homes and to be represented by them. *This will go into effect mid-July 2024   

Buyers may need to have additional funds to pay their agent to represent them and their best interests, if the seller is unwilling to offer cooperative compensation.   

Sellers: 

Sellers may have to wait longer to sell their property because buyers don’t have the funds to cover the cost of their agent.  Eventually, Sellers will want or need to negotiate with their listing agent and offer cooperative compensation to buyer agents.  

 Listing agents and sellers could continue to offer compensation for buyer broker services but that offer of compensation cannot be communicated via the Multiple Listing Services.   

Compensation would continue to be negotiable.     

Beware: there is A LOT of misinformation regarding this settlement and our industry.   

**This Settlement has yet to be approved by the Court**

As a broker I am aware of what is going on in my industry and how this settlement will affect both sellers and buyers. I am constantly being updated by my legal-risk management team, as to industry updates, legal cases, terms of settlement, changes in our Multiple Listing Services, etc.    

If you have questions regarding this settlement and how it can affect you as a buyer or seller, PLEASE call, text or email me with your questions, I will be more than happy to go over your particular situation and together we can figure out what is the best course for you.