Say goodbye to costly home sale commissions

An NAR settlement ending multiple lawsuits changes the way houses are bought and sold.

Selling a home with a Realtor may cost less, thanks to a settlement between the National Association of Realtors and the homeowners who sued them. That mandatory 6% seller’s fee? Forget about it. In the March 2024 settlement, the NAR agreed that all commissions are now negotiable. 

The $418 million settlement comes after multiple lawsuits argued that real estate brokers were colluding to hike up their compensation, requiring home sellers to pay inflated fees. The NAS required brokers to set a non-negotiable commission for all property placed on the Multiple Listing Service — a database of homes currently on the market. That fee was tacked onto the seller’s final closing costs.

Real estate agent fees will now be negotiable, which may cut down on closing costs.

Defendants also claimed that buyer’s agents were rewarded if they did not show their clients listings offering low commissions. The March settlement resolves multiple claims which have been brought against more than 1 million real estate agents, brokerages and associations. 

For decades, buyer and seller agents have split a commission paid by the seller — typically 6%. As part of the settlement agreements, firms will now encourage — and some may require — their agents to let both buyers and sellers know that commissions can be negotiated. There is no minimum fee required by law.

Also part of the settlement, agents and clients now must have a written agreement regarding payment before using the Multiple Listing Service. That agreement would tell sellers the exact services that will be provided, and what the cost of those services will be. In addition, the NAR will not be allowed to set up rules governing compensation between agents. Pending court approval, the change becomes effective mid-July 2024.

More people may offer their homes for sale by owner following changes in the real estate market.

Experts believe the settlement will lead to sweeping changes in the real estate industry. Commissions will likely be lower overall as clients choose which services they are willing to pay for, which could lead to a smaller number of sales agents. Also, more people may decide they don’t need a real estate agent at all and may opt to offer their home for sale by owner.

You can be your own agent when you sell your property on KSL Homes. You set the price, write the description and include all the relevant details. Add a Custom Ribbon, which will be displayed at the top of your picture; use it to highlight a feature or announce an open house. We’ll even help you get ready to sell, with suggestions for taking the best photos to staging your home.