Quote Originally Posted by Ryback_feed_me_more View Post
Quote Originally Posted by Dan Druff View Post
For many decades, it has been an accepted practice for real estate agents to charge 6% commission of the final price in a home sale -- to be split evenly (3% each) between the buyer's realtor and the seller's realtor. That might change, as a huge court case in Missouri awarded $1.8 billion against the National Association of Realtors (NAR) and two brokerage firms, in what was alleged to be price-fixing and anti-competitive practices.

Any seller who refused to pay such commissions was not allowed to post on the Multiple Listing Service, where most homes for sale are found by prospective buyers. The court case claimed this locked buyers and sellers into the fixed 6% commission model.

The NAR argued that commissions are always negotiable, but still lost the case.

Here's a good writeup of the situation on CNN: https://www.cnn.com/2023/11/05/homes...fee/index.html



Interestingly, the one point not really raised in this whole thing is the biggest issue I have with the entire residential real estate commission model. Commission should NOT operate like tips in a restaurant. It should be a price based upon the service provided. There is no reason that a realtor selling a $2,000,000 house should make 10x the commission compared to the one selling a $200k house, as the work involved is very similar in both cases.

This really should operate in a free market fashion -- where realtors charge commissions based upon the demand for their services, and where it is mostly unrelated to the price of the property being sold.

However, this point was not really a part of the lawsuit, but instead focused on the anti-competitive practices.

It is true that you can negotiate with your realtor, sometimes reducing the commission to as low as 1.5%, but usually the other side doesn't bother, so 3% still comes off that side of the purchase price.
Anybody know how some of these companies like 72Sold and others get around that because Im pretty sure that commission isnt as high with them and they do get on MLS I believe.
See the last post I just made. There are low commission operations, but they have their own issues, as they deal in high volume, don't dedicate much time to each sale, and tend to like to underprice homes just to get them moved.

So it's a shitty choice. You either go with a crappy realtor, pay the mostly-fixed-3% commission of a good realtor, or attempt to go it alone and do a "for sale by owner".