In March, the National Association of Realtors (NAR) agreed to settle a lawsuit by implementing new rules on real estate commissions. Those rules began rolling out on Aug. 17, according to financial services company Bankrate. Under the traditional model for real estate commissions, sellers paid a commission averaging 5% of the home's sale price, split between the listing agent and the buyer's agent. While the fees typically came from the seller's proceeds, buyers indirectly covered them through the home’s sale price.
The new rules prohibit listing agents from offering compensation to buyer’s agents through NAR-affiliated multiple listing services. Buyers now need a written contract with an agent specifying the fee before viewing homes. It remains unclear how, exactly, these rules will play out, but there are several perspectives out there.
One narrative predicts a coming utopia for homebuyers: A price war will erupt, and commissions will plunge amid a new wave of competition among buyers’ agents. A competing narrative goes in the opposite direction: Under the new commission structure, buyers will realize they’re on the hook for thousands and decide not to use agents at all.