How the process for buying and selling a home could change

Last week, a federal jury in Missouri found the National Association of Realtors and two real estate brokerage firms were liable for $1.8 billion in damages for conspiring to keep commissions artificially high.

NAR is appealing this verdict, so change to the real estate commission structure doesn’t appear imminent – however, much like winter, it’s coming.

Here’s a non-exhaustive list of what that could look like:

• Sellers’ agents can’t offer commissions upfront. Currently, sellers need to declare the proposed buyer’s agent commission when listing a home on the MLS. One outcome if this were to change: buyers would pay their own agents, but could negotiate for the seller to help cover the cost.
• Buyers must pay their own agents. Buyers in other countries often forego an agent, or pay them directly. However, this arrangement could affect first-time and low-income homebuyers the most, since they’re the least likely to have additional savings to pay for an agent on top of a down payment and closing costs.
• New models arise. Real estate startups like Purplebricks have experimented with flat fees in the past. Other models could also arise.

👀 Looking ahead… Selling Sunset could have a few less people in front of the camera. Ryan Tomasello, a real-estate industry analyst, predicts this lawsuit (and others) could lead to a 30% reduction in the $100 billion Americans pay in real-estate commissions every year and push more than half of the ~1.6 million agents out of the industry.