The multi-billion-dollar real estate industry is being rocked by one of the biggest revolts in its modern history — multiple agencies have decided to quit the group that’s long set the rules for realtors.
SEATTLE – The multi-billion-dollar real estate industry is being rocked by one of the biggest revolts in its modern history: multiple agencies have decided to quit the group that has long set their rules.
For buyers and sellers, it might mean you save thousands and thousands of dollars in fees, depending on which side of the deal you’re on.
That’s because nearly a half-dozen of the nation’s top brokerages are no longer requiring their agents to be part of NAR, the National Association of Realtors.
Homeowners will remember the pain of signing several pages of documents and reading multiple paragraphs of real estate literature. Somewhere amid the requirements about insurance and property taxes, there’s what amounts to one of the biggest expenses of selling a home: covering the fee for the buyer's agent.
According to a survey from ListWithClever.com, the average real estate commission in Washington is 5.30%, which is slightly less than the national average of 5.37%. Doing the math, if you want to sell a house in Washington worth about $578,000—the median home value in Washington—be ready to pay more than $30,000 in realtor fees.
The buyer's fee has been a part of the real estate process for so long, it may feel mandatory to consumers. But following a pair of successful class action suits, NAR now says that fee can be negotiated all the way down to ‘zero’ for its realtors.
"We're noticing a lot of transparency wanting to be had in the buying and selling process of real estate," said Brian Truman, a realtor for Exp Realty. "That's a lot of what this commission being declared, being opened up for consumers being able to see."
The New York Times reports these major real estate brokerages have announced they no longer want to be associated with NAR: Remax, Sotheby's, Century 21 Real Estate, Coldwell Banker, and Seattle's Redfin Corporation.
That could mean it would be harder to find an agent, according to Truman.
"I think it's going to weed out people, because there are some people—and when I say people, I mean agents—that are on one side of the fence, and the other that are frustrated by what's going on, and they're just going to get out of the business," Truman said.
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In a statement to FOX 13, Redfin said:
"Real estate agents provide a valuable service and we deserve to be paid for that service. And consumers deserve transparency about how agents are paid. The fees for representing a seller are already competitive because the sellers' agent discloses them up front. If buyers paid their own agents, the fees for representing a buyer would become competitive too, which could save consumers billions of dollars every year."
Truman said the end result for buyers and sellers will be more about quality than obligation, saving both sides of the deal.
"If you are any realtor worth their fee, they should be paid it," Truman said. "But if they're not, they're also going to have to suffer the consequences of not doing a good job."
There is a bit of a catch to this situation, however, and we'll see how this all unfolds in the future. While companies can choose not to have its agents be NAR members, agents are sometimes required to be a NAR member if they want to access a multiple listing service, which is necessary to sell real estate.
In King, Pierce, Snohomish County, realtors use the Northwest MLS, which does not require realtors to be NAR members to access it.
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