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Real Estate Commission Changes Set to Revolutionize Home Buying and Selling

A landmark settlement will alter commission structures, potentially saving buyers and sellers billions.

MIAMI, FLORIDA - MARCH 15: In an aerial view, homes sit on lots in a residential neighborhood on March 15, 2024, in Miami, Florida. The National Association of Realtors announced that it had reached a nationwide settlement of claims that the industry had conspired to keep agent commissions high. As part of the settlement, the National Association of Realtors did not admit wrongdoing but agreed to pay $418 million over the next four years. (Photo by Joe Raedle/Getty Images)
A person stands outside homes on Greenwich and Child Street in Telegraph Hill in San Francisco on Friday, Feb. 9, 2024. Luxury home sales were significantly down in 2023 and experienced real estate brokers have theories about macro economics, changing attitudes, and the San Francisco housing crisis.
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Overview

  • Recent settlement in a class-action lawsuit against the National Association of Realtors mandates changes to real estate commission structures.
  • The changes, expected to be implemented by summer 2024, could disrupt the $100 billion commission business, halving agent fees.
  • Buyers and sellers will gain negotiating power over commissions, leading to potential savings on home purchases and sales.
  • Experts predict a more competitive real estate market, with potential for agents to exit the industry due to reduced earnings.
  • The settlement is unlikely to lower home prices directly, but could increase market activity by making the buying and selling process more affordable.