POV: you’re a real estate agent rn

If the real-estate commission structure was a fable, it’d be the Three Little Pigs – because the proverbial big bad wolf is coming to potentially huff and puff and blow the house (heh) down.

The wolf in question? The Justice Department, which is considering legal intervention to change the lucrative real estate commission-sharing system, according to a new report from Bloomberg.

💰🏡 Background: When you sell your house, you’re most likely paying between 5%-6% in broker fees, split between the buyer’s agent and the seller’s agent. For example: if a home sells for $412,502 (the current median sale price), its total commission payout would equate to roughly $20,000. The National Association of Realtors, which represents 1.5+ million agents and has even trademarked the word “Realtor,” requires sellers to publish the proposed buyer’s agent commission in order to list the home on virtually any listing service.

• Critics say this arrangement keeps costs high in violation of US antitrust law. Research shows homes with lower buyer agent commissions take longer to sell and are less likely to sell at all.
• NAR argues the current real-estate commission structure benefits buyers, making it easier for first-timers in minority and lower-income groups to purchase a house.

👀 Looking ahead… Two class-action suits challenging the commission structure are currently making their way through the courts, but only the DOJ can make any major changes. And if they do, Redfin CEO Glenn Kelman told Bloomberg that “[h]alf the real estate agents in this country would be unemployed.”