re: National Association of Realtors agrees to end 6% commissions

quote:

---

quote:

---

A realtor who is established and provides exceptional service should be able to charge 10% for it.

---

So on an average 300k house, the homeowner is on the bill for 30k not counting potential repairs and closing costs? Are you out of your mind?

---

I think y’all are way too focused on the 10% example and are missing his larger point:

quote:

---

There shouldn’t be a set standard or rate.

---

He’s right. Commissions should be based on the value that the realtor provides, not fixed by the industry.

Right now (as I understand it) there’s basically a standard 6% commission on all listings, and the seller’s agent pre-determines the “split” to the buyer’s agent when they list the property. But the seller pays the full 6% regardless, and the split is basically a kickback from the seller’s agent to the buyer’s agent.

It’s a fricked up system that is bad for competition (but good for realtors) in multiple ways. Instead, there should be two deals - one between the seller and his realtor, and another between the buyer and his realtor.

Kickbacks from the seller’s agent to the buyer’s agent shouldn’t even be legal as it creates a conflict of interest where the buyer’s agent is incentivized to look for the best commission (based on property value x split %) rather than the best property. It probably makes more sense for buyers’ agents to use a flat fee system or even a system where the commission % drops off as property value increases, to incentivize the best deal. Either way the market should determine the best pricing method, not NAR.

Meanwhile sellers’ agents should be able to charge more if they’re really fricking good at their jobs, or forced to charge less if they are worth less. The seller’s agent (and by extension the seller) shouldn’t have to pay a kickback to the buyer’s agent to get them to pitch the property. Again, this shouldn’t even be legal.

It sounds like this will all change assuming the settlement gets approved by the judge.