Share this @internewscast.com

The process of buying a home has seemingly never been simpler: Find a property on a listings website like Zillow, Redfin or Trulia; reach out to the listing agent; tour the property; and make an offer.

But for years behind the scenes, experts say, consumers have not been fully aware of the ultimate cost — and potential conflicts of interest — when searching for a home.

Now, a landmark settlement with the National Association of Realtors is poised to upend this model. According to consumer advocates, and even some realtors, it’s a win for homebuyers and sellers.

“Price transparency is a good thing, increased competition is a good thing, and this will increase both,” said Mariya Letdin, an associate professor at Florida State University’s College of Business. “I really welcome this change.”

When someone goes looking for a home today, they are in most cases intercepted by a broker who has access to certain listings and who will work with the buyer at no cost upfront to help them get into a home.

But therein lies a common misconception, experts interviewed by NBC News said. Although a homeowner who puts their property up for sale must hire professionals to market their home, they usually fold that cost into the final price paid by the buyer.

“The buyer brings the entire purchase price to the table,” Letdin said. “And the seller gets to keep a little bit more of that after this ruling.”

As part of the new settlement, the buyer should now be fully apprised upfront about any potential fees or commissions they’ll ultimately have to pay.

That’s because the agreement requires that a buyer sign a formal contract with a broker laying out what services they’ll be receiving, and for how much.

Alternatively, a homebuyer could decide not to hire a broker and instead put their search costs toward a real estate lawyer, appraiser or someone else with knowledge of the housing market, experts say.

And a seller could even offer to cover the cost of the buyer’s team as an incentive to attract more buyers.

Of course, for a property that’s garnering a lot of attention, such buyer incentives are unlikely to be on the table.

And in the months following Covid-19 pandemic reopenings, the hottest U.S. real estate markets were tipped squarely in favor of sellers.

But now, with home price growth leveling off, the playing field is leveling out too, putting more buyers in the driver’s seat, experts say.

“Now you can hire an attorney for $1,500, instead of paying a $50,000 commission,” said Doug Miller, a real estate lawyer based in Minnesota who helped launch the actions that led to the NAR settlement.

Whomever a prospective buyer chooses as their representative in the homebuying process, the NAR settlement now formally bans the seller’s ability to advertise a commission for the buyer’s reps on the multiple listing service.

For its part, the NAR has maintained that the free market has always set commission levels, and that they were always negotiable — and even useful.

“Offers of compensation help make professional representation more accessible, decrease costs for home buyers to secure these services, increase fair housing opportunities, and increase the potential buyer pool for sellers,” the NAR said in its March 15 statement announcing the agreement.

But in most cases, there was little difference in the amount being offered for those commissions in a given market — usually about 3%.

That’s because any attempt to offer a lower commission to a buyer’s agent would likely motivate the agent to direct their client away from that property.

Miller characterized that behavior as improper and said buyers, in many cases, would have had no awareness of it.

“The future here is that buyers will now be in the driver’s seat,” Miller said. “Instead of that [commission] money going to their agent … it can now go directly to the buyer. It’s the same amount of money, but now the buyer gets money instead of a buyer agent, and they can decide what to do with it.”

What’s more, greater competition for clients is likely to result in lower costs across the board, said Ryan Tomasello, a real estate industry analyst with the Keefe, Bruyette & Woods financial firm.

“When you introduce a ton of transparency to a marketplace that has historically lacked it, any economist will tell you that reduces friction costs — i.e., commissions — and those are some of the highest in the world,” Tomasello said. “So the all-in cost of buying and selling a home, in theory, is going to decline.”

Many experts, including other real estate professionals, agree that the settlement will effectively thin the ranks of fly-by-night agents who served as an intermediary — a phenomenon that surged during the pandemic-era housing boom.

“A lot of folks parachuted in during 2020-2021 to try to make easy extra money by putting themselves out there as a buyer agent and taking 3%,” said Phil Crescenzo Jr., vice president of the Southeast division at Nation One Mortgage Corp.

“But they weren’t bringing 3% of value — not even close.”

Crescenzo compared it to moonlighting mortgage brokers who helped fuel the housing bubble of the mid-to-late 2000s.

“Once they changed the compensation rules, the dominant professionals rose to the top, the bottom disappeared, and the industry got better,” Crescenzo said.

Share this @internewscast.com
You May Also Like
The Louvre detective? Mystery dapper 'detective' in AP photo after the Louvre heist creates social media buzz

Mystery Man in Dapper Attire Sparks Online Frenzy After Louvre Heist

PARIS — In the aftermath of the audacious theft of the crown…
Jail's tight leash on Charlie Kirk's alleged assassin all about 'safety,' not silencing, expert says

Attorneys for Alleged Assassin in Charlie Kirk Case Seek Courtroom Camera Ban to Combat ‘Content Tornado

Lawyers representing the man accused of killing Turning Point USA founder Charlie…
Oswego, IL Chick-fil-A: Darryl Lee Jr., 19, charged with murder in stabbing, attack at restaurant on Route 34 held in custody

Oswego Chick-fil-A Stabbing: 19-Year-Old Darryl Lee Jr. Charged with Murder at Route 34 Restaurant

A man implicated in a fatal stabbing incident at a Chick-Fil-A in…
Dramatic video shows NYPD officers rescuing a missing dog named Moose from beneath a Manhattan subway train

Watch: NYPD Heroes Save Missing Dog ‘Moose’ from Manhattan Subway Tracks

A dramatic rescue unfolded in Manhattan as officers from the New York…
US deploys Ford carrier strike group to combat narco-terror in Western Hemisphere

US Deploys Ford Carrier Strike Group to Tackle Narco-Terrorism in Western Hemisphere

The Trump administration has issued orders for the Gerald R. Ford Carrier…
Universities defiant on Trump's academic excellence compact as feedback deadline passes

Universities Stand Firm Against Trump’s Academic Excellence Compact as Feedback Deadline Expires

In a notable response to the Trump administration’s proposed Compact for Academic…
Study links TikTok use to Gen Z women’s attraction to criminals

New Study Reveals Surprising Connection Between TikTok Use and Gen Z Women’s Interest in ‘Bad Boys

Gen Z Women Are Swooning Over These Men! A recent study reveals…
Freed Gaza Prisoner Reveals “Hell Beneath the Ground”

Inside Gaza’s Underground Nightmare: A Former Detainee’s Harrowing Tale

A recently freed Palestinian detainee has delivered devastating testimony detailing what he…
Ontario premier says he'll pull ad that upset Trump so trade talks between Canada and US can resume

Ontario Premier Withdraws Controversial Ad to Reopen Canada-US Trade Dialogues

TORONTO (AP) — The Premier of Ontario, Canada’s most populous province, announced…
Hormel recalls 4.8M pounds of frozen chicken after multiple metal contamination reports

Hormel Initiates Recall of 4.8 Million Pounds of Frozen Chicken Due to Metal Contamination Concerns

Hormel Foods has chosen to withdraw several of its frozen chicken offerings…
30 California District Attorneys Are a Hard NO on Prop. 50, Gavin Newsom's Gerrymandering Scheme

AAG Dhillon Calms Tensions with Governor Newsom Over DOJ Election Monitoring Plans

The Department of Justice has announced plans to deploy election monitors to…
Investigators uncover possible serial killer linked to women’s murders, missing TV anchor

Investigators Discover Potential Serial Killer Connection to Women’s Murders and Disappearance of TV Anchor

This week, officials disclosed that a man once considered a key figure…