Recent headlines have suggested that the era of the 6% commission for selling a home is over, promising significant savings for home sellers. However, the reality is more nuanced. Real estate commissions have always been negotiable, with some agents charging 6%, others more or less, and some even offering flat fees. The idea of a “standard” 6% commission is misleading and not allowed under the Sherman Act, which prohibits price fixing. Each company sets its own rates, and the commission is typically split between the seller’s agent and the buyer’s agent to facilitate a successful sale.
A few years ago, a lawsuit claimed that sellers were overcharged because they were “forced” to pay the buyer agent’s commission, leading to a settlement that included significant changes in the industry. One major change is that agents must now have a signed agreement with any buyers they work with, a practice that was not consistently enforced before. The commission offered to buyer’s agents will no longer be advertised in the Multiple Listing Service (MLS). Despite these changes, the cost of commissions is often bundled into the price of the home, which the buyer pays through their mortgage over time. This system ensures that buyers can afford professional representation without upfront costs, maintaining a fair balance in real estate transactions.
Know your home’s worth, click here.
Homes for sale in Carmel Valley click here.
Shirin Rezania Ramos | 858.345.0685 | www.shirinramos.com | Compass, DRE 0203379
