The realm of home buying in South Florida is in the midst of a groundbreaking transformation following a lawsuit against the National Realtors Association, challenging antitrust practices concerning commission setting and distribution among buying and selling agents.
The conventional 6% commission structure, long entrenched in the industry, is on the brink of evolution.
Brickell-based real estate attorney Ben Solomon shed light on the pivotal change, stating, “There was a cooperative compensation model rule where the MLS was allowing the seller to essentially set the buyer’s commission side and that is the big shift. Now buyers will be able to contact and negotiate those realtors’ fees, they may very well be the same rate.”
The potential for negotiating agent commission fees signals a potential for significant reductions in home prices. Critics contend that commissions have occasionally inflated home prices by tens of thousands of dollars.
In a historic $418 million settlement, the National Realtors Association has agreed to ban compensation offers on the MLS, empower consumers to negotiate compensation offers off the MLS, and allow sellers to offer buyer concessions on the MLS, such as covering closing costs.
Joel Freis, a realtor with EXP Realty, highlighted ongoing trends, stating, “There’s already been compression on commission rates. We’ve already seen listing agents taking listings and if I sell on my own I’ll take it for less commission, this has been going on for two years or longer.”
Denise Madan, another realtor with EXP Realty, echoed similar sentiments, stating, “We’ve already been telling sellers when we sign a listing agreement, this is what the commission is and on the listing agreement you can agree what to pay a cooperating buyer agent.”
Effective immediately, homebuyers will have the autonomy to decide upfront the commission to pay their agents and formalize it in a written contract. Realtors foresee that the fees may remain largely consistent with current levels.
Experts perceive the settlement as a catalyst for closure, dispelling ambiguity on a national scale.
Ben Solomon underscored the significance, stating, “If this was to drag on it could clog courts in many different jurisdictions and come up with different results, at least this is the NAR settling the matter, and that will help calm the markets and get back to business. That’s a very positive outcome.”
The finalization of the new rules is expected to take several months, with realtors anticipating implementation by mid-July.
