Consider This from NPR A Class Action Suit Could Upend The Entire Real Estate Industry
Nov 5, 2023
A groundbreaking class action lawsuit challenges the hefty commissions in the real estate industry. Home sellers argue that these fees inflate home prices and undermine fairness. The recent $1.8 billion jury award could reshape how commission structures operate. Discussions around 'decoupling' agents' fees suggest a more balanced approach for buyers and sellers alike. This legal shift may also impact first-time homebuyers, reshaping the entire market dynamic.
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Who Pays the Agent?
- Nick Krause and his wife, first-time homebuyers, were surprised to learn their agent's commission wasn't paid by them.
- The seller covers both agents' fees, a practice they found unusual.
Commission Origins
- Real estate agents typically earn 5-6% of a home's sale price, paid by the seller.
- This practice originated over 100 years ago with the Multiple Listing Service (MLS).
Conflict of Interest?
- Critics argue that sellers paying both agents creates a conflict of interest.
- It may inflate home prices and limit buyers' negotiating power, says Steve Brobeck.