The Expert Podcast

If you're a potential home buyer, this case may actually benefit you in the long run for decades. The National Association of Realtors has basically fixed prices on commissions. Now, technically, they weren't fixed, but they were highly recommended, and the system almost made it impossible for a buyer to be their own agent. So, let's say you want to look for a house and there's a listing that you have. You could talk to the selling agent, who has a 6% commission (or 5% in some places), and negotiate directly with them to buy the house, or you could get a buyer's agent to work for you. Those two agents would split that 5% or 6%, but there was no way for you to deal directly with the seller's agent and have them just get 3% so you could save money on the sale.

This lawsuit, which has already gone through, I believe it was in Arizona or New Mexico, and another one in Chicago may upend the way that real estate transactions are done. It could save money for buyers because if you deal directly with the seller's agent, they can maybe discount the commission and lower the price of the house. So, keep an eye on this case to see if, in the future, buying a home may be cheaper because real estate commissions and fees are going to be less.

Look, real estate agents have received higher fees over the last few years because home prices went up. It may not have been harder to sell the house, but more work and commissions went up. For example, when the median price of a home was, let's say, $180,000, you got 3% of that, which was maybe around $5,000. But if the median price of a home is now $400,000, 3% of that is $12,000. It's not that much harder to sell a home. In fact, it might be easier because people want to buy them. There's not as much work in negotiation now since there are fewer listings. I'm not trying to take away the hard work that Realtors do, but there is some inefficiency in the system that maybe this case will resolve, making the buying process a little easier and maybe even cheaper.