What's Happening With Real Estate Commissions - Part 1

By now most people have read about the recent lawsuit against the NAR. From the questions I get from clients and friends, it's apparent no one is quite certain what it means. And of course, much of it is misinformation. What is certain is that there is a sea change coming to real estate and it starts August 17, 2024.

The gist of the lawsuit against the NAR was the "offer of compensation" listed on Multiple Listing Sheets. That phrase refers to the seller who covers the commission for both their agent and the buyer's agent. The portion of the commission that went to the buyer's agent was advertised on the Multiple Listing Service that agents use. 

The plaintiff's lawsuit contended that NAR and large brokerages conspired to inflate commissions, reduce competition, and inflate home prices.

From Nerd Wallet:

"The lawsuits challenge NAR's cooperative compensation rule, which requires seller's agents to make "blanket unilateral offers of compensation" to buyer's agents. To list a home on an MLS, the seller must make this "blanket unilateral" offer to pay buyer's agents, who influence which houses their clients consider."

The lawsuit specifies that sellers no longer need to pay for the buyer's commission. I believe it's still in their best interest to do so because buyer agents bring tremendous value to the transaction and should be compensated. The alternatives, listed below, put an undue burden on already-stressed home buyers.

If the seller declines to pay, the buyer's agent's compensation could become part of the negotiation for the home, which I think will become most prevalent. 

Buyer's agents will start asking buyers to sign contracts that specify how they will be paid. They could pay hourly for home showings or a flat fee for handling the entire transaction. They may ask for the commission to be paid by the seller if they can't come up with the funds.

We agents will continue to service our buyers and sellers as usual. We're getting educated on the changes and consulting with our clients on how to move forward. There are still many unknowns that may not be understood until we're past August 17 and see it play out. 

An excellent article for more information:

With Real Estate Commission Rules Changing, Should I Wait to Buy a House?

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Margaret Goss is a full-time real estate broker since 1998 working in the North Shore communities of Winnetka, Wilmette, Kenilworth, Glencoe, Northfield, Glenview, and Evanston.

She can be reached at:

Phone:  847-977-6024

Email:  margaret.goss@bairdwarner.com

See her full BIOGRAPHY