NAR Settlement and Real Estate Commissions

by Amy Cuny

When it comes to buying or selling a home, one of the most common questions people have is about real estate comissions. How do agents get paid? Who pays them? Can you negotiate those fees? The answer to the last question is a resounding yes! Real estate commision is not set in stone, and recent headlines have brought this topic up in ways that haven't been discussed before. (Just a side note, we will not be using ANY figures in this post-it is a big "no-no" and can be considered fixing our prices!)

Understanding Commission

Traditionally, agents earn a commission based on the sale prive of the home. This fee is usually split between the buyer's agent and the seller's agent. For decades, it's be common practice for the seller to pay both sides of the commission, which is then divided between both agents. But here's the key: there is no law or rule that requires a set rate-everything is negotiable!

The NAR Lawsuit: Changing Conversations

Recently, the National Association of REALTORS (NAR) faced a high-profile lawsuit challenging the way commissions are handled, praticularly who pays who. Plantiffs argued that this system kept commissions high and was limiting competition. In March 2024, NAR reached a settlement and it reshaped how agents are paid altogether.

What Does the Settlement Change?

Transparency: Agents are now encouraged to upfront about how commission works and who pays what.
Negotiations: Both buyers and sellers have more freedom to negotitate rates with their agents. This could lower costs for sellers, or buyers choosing to pay their own agent directly.
Saving Potential: With more competition and flexibility,, consumers may see a difference in rates as they talk to different agents.

How to Negotiate Commission?

Whether you're buying or selling, don't be shy about discussing commission rate with your agent. Be upfront and ask them to explain their agreement and what services are included. You can shop around and interview different agents to see who you mesh well with, don't feel like you're stuck with the first one you come across. Make sure you're clear about your needs upfront. If you need to sell fast, the plan the agent may come up with will differ from one that can sit on the market a while.

Bottom Line

Real estate, our forms, and our laws are always changing. Don't be afraid to ask questions that help empower you as a buyer or seller. We, as agents, want to be as transparent as possible while still abiding by our local, state, and federal laws. Thinking about selling or buying in Baldwin or Mobile County, don't hesitate to reach out and see if we fit well together.

Amy Cuny | 251.709.4331 | Amy@AmyCuny.com