This past weekend I did something I hadn’t done in roughly 45 years…I broke a bone. Though it was a very small bone, its affects have rippled through all aspects of my everyday life. Walking, driving, standing all needs to be reworked for the next 6 weeks. As I limp around adjusting to my new normal, I can’t help but think of the parallels with the current real estate industry, struggling to adapt to the recent court ruling in National Association of Realtors lawsuit.

Last year, a district court in Missouri heard the case of Burnett vs NAR (plus a group of brokers) alleging that NAR policies kept commission rates artificially high amounting to collusion amongst real estate brokers. The court ruled in favor of the plaintiffs with billions (!) awarding in the settlement, leaving the 1.5 million Realtors ® confused as to what changes need to be made to their current business practices.

Consumers were left confused as well…should they offer compensation via a shared commission to a Buyers Broker or not?

First, last and always, COMMISSION IS NEGOTIABLE. If you as a Seller don’t want to pay a Buyers Broker, you are not obligated to do so. Your listing agent should go through your listing contract in detail, with the commission amount clearly agreed upon along with any co operative agreement with a Buyers Broker.

You can find an agent to list for as low as 1% or you can DIY your sale for even less. Great, you say! What wouldn’t I want a lower commission rate, netting me more at closing? What downside could that possibly have? Aren’t Realtors® just glorified “door openers” anyway?

Some agents definitely are “door openers”, looking to quickly write a contract & move on to another transaction.

But I would argue most Realtors®, like myself, spend hundreds of hours per transaction doing a variety of tasks such as…

1. Monitor progress on the lender side of the transaction
2. Facilitate negotiations for repairs to the property
3. Coordinate inspections
4. Initiate questions for municipalities & closing attorney
5. Assist in home staging
6. Create eye-catching advertising
7. Wordsmith marketing pieces to present a property in its best light
8. Share knowledge of local area developments
9. Utilize pricing expertise
10. Schedule photography/videography

…and on and on….Basically everything it takes from the initial presentation of the property to the final signatures at the closing attorney’s office, Realtors® with a mission embrace all of this.

If the lawsuit does survive upon appeal, I would then expect real estate attorneys to be called upon to represent Buyers as is typical in New York, adding fees to the transaction as well as additional time in escrow. Will these fees be higher or lower than offering a co op Buyers Broker fee? Hard to say at this point.

As we work through the new post judgment landscape, my hope is for the real estate industry as a whole to become stronger, sort of like how that tiny bone in my foot will heal stronger along the line of the break. In the meantime, we all might be limping along a bit until we get there.