- The National Association of Realtors agreed to reduce commissions as part of a $418 million settlement.
- Buyers' agents will no longer charge 6% commission fees for helping buyers purchase a house.
- However, the lowered commissions may mean buyers have to do more work themselves.
When the National Association of Realtors this week agreed to a landmark $418 million settlement to dismiss a wave of class-action lawsuits, the 6% commission — an industry-standard fee among NAR agents to help buy or sell a house — went with them.
And while the new rules around Realtors' commission fees mean buyers may save thousands of dollars on their homes, they may also end up doing more work themselves to find and purchase new houses.
Robby Braun, partner at Cohen Milstein Sellers & Toll, told Business Insider that, as the sweeping changes in the market go into effect over the next 4-6 months, buyers "will have transparency into, and be able to negotiate, what their own brokers are paid."
But that negotiation is just one of several new ways buyers may have to involve themselves in the purchase process in the new world of home sales.
The Wall Street Journal reported some buyers will now negotiate and pay their agents a flat fee or hourly rate rather than rely on the property seller to set the rate as has been typical in the industry for years, while some sellers are poised to offer lower commissions built into the sale price of a property.
Other sellers, the outlet reported, won't offer any commission to pay a buyer's agent at all in a process called decoupling. If the seller doesn't shell out for the buyers' agent fees, as real estate transactions have typically been structured, this will leave the buyer's agent commission negotiations — and potentially the out-of-pocket payment for their fees — up the the buyer.
With some Realtors now set to compete with their commission rate, buyers can be choosier about the agents they work with and the services they're hired for, per The Washington Post — and the changes in the market mean some buyers will decide to avoid using an agent altogether, opting instead to do all the work themselves.
While the changes could save homebuyers upwards of $30 billion a year in comparison to the current system, The Journal reported, it remains unclear exactly what the process for buying a new home will look like in the coming years as new procedures are implemented.
"This is by far the biggest change to hit the real estate industry in more than 30 years," Toby Schifsky, vice president of real estate education company Kaplan, previously told BI's Grace Eliza Goodwin about the NAR settlement.