Chapter 16
Commission Mission If you ask a typical homeowner how much commission they would like to pay a real estate agent? They would most likely say...the least amount possible. However, they all agree that paying a commission is necessary if they want to hire professional help to have someone work in their best interest, negotiate the most money for their home, to stay on top of the transaction and to handle all the paperwork. Did you know the laws governing Realtors commissions changed in August of 2024? The Listing Agent must explain to the homeowner that commissions are not set by law or by any Realtor association and is fully negotiable between the seller and the agent. There was a recent class action lawsuit against the National Association of Realtors (NAR). The lawsuit alleges that Brokers inflated the commission rates to include compensation to the buyer’s agent, without fully explaining how commissions are paid. So now homeowners have the option of just paying the listing Broker. They can include or allow compensation to the agent selling the home. It is the agent’s responsibility to explain the new guidelines to the homeowner. How does that play out in the sale of your home? You can decide that you only want to offer compensation to the listing agent that you hire. You, as the homeowner can decide you will not allow the buyers to incorporate their agents commission fee in to the sale. If you choose to do this...the buyers must pay their agent separately at the closing table. Some buyers do not have enough funds to come up with the down payment, pay their closing costs and pay their agents fee to get to the closing table. The purpose of this class action law suit is to get the Realtors to
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