New opportunities and challenges await buyers and sellers as real estate agent fees become more competitive. While you can save thousands, navigating the new rules can be confusing. Your financial professional can help guide you. In this article, we'll highlight key blind spots to be aware of when making decisions and provide tips to help you save on commissions without compromising on agent quality.

Why was the National Association of Realtors (NAR) sued?

NAR was accused of setting rules that inflated real estate agent commissions in the United States, where fees are some of the highest in the world. Traditionally, home sellers were automatically paying their agent’s commission and the buyer agent’s commission -typically 3% per agent, totaling 6% of the sale price.

NAR denied any wrongdoing but paid $418 million to settle the lawsuit. The court’s ruling helps buyers and sellers by creating a fairer market with more competition. The landmark ruling has major implications though.  

What do sellers need to know? 

Sellers are only responsible for paying for their own agent’s commissions now, and the commission rate is no longer set at 3% - it can be negotiated. Saving 1%, or even 0.5% on a fee may seem trivial, but it results in saving thousands depending on the sale price. These new rules can save sellers money, but there is a catch.

Many first-time homebuyers will not be able to raise enough cash for a down payment and their agent’s commission. In other words, sellers may find it worthwhile to consider paying some or all of the buyer’s agent fee in order to get the deal over the finish line.

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