Real Estate Commissions Could Drop Up To 50% And Homeowners Couldn’t Be More Relieved – The Average Joe
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    Real Estate Commissions Could Drop Up To 50% And Homeowners Couldn’t Be More Relieved

    Rhea Lobo

    March 18, 2024

    RIP to the 6% realtor commission; you will not be missed (except maybe by real estate agents). Last Friday, the National Association of Realtors (NAR) agreed to allow customers to negotiate broker commissions, resolving lawsuits alleging artificial commission fee inflation. This change could mean big savings for homeowners selling their properties.

    • Experts at TD Cowen Insights predict real estate commissions could plummet 25% to 50%, paving the way for alternative flat-fee and discount brokerages.
    • A Federal Reserve Bank of Richmond study suggests that if homebuyers pay agents directly, they could save $30B annually by bargaining for lower prices and viewing fewer homes.

    What does the future hold? Although this deal may reduce seller commission costs, it may not necessarily lower home prices. There’s a risk of “steering” by realtors, where buyers are influenced toward certain homes for reasons unrelated to their needs. However, sellers can still try to cut costs by negotiating lower commission rates with their agents. While negotiable commissions could attract new homebuyers, high mortgage rates and home prices could still hold them back.

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