ROANOKE, Va. – There could soon be a housing market makeover.
A $418 million lawsuit settlement means the standard 6% commission paid by the seller will no longer be the norm. Those fees were often bundled into the listing price of a home and the costs fell to the buyer.
Now, buyers and sellers will be empowered to negotiate commission fees. Lower commissions could mean lower home prices.
Some buyers may forgo a broker altogether to try to save money.
“This is one of the biggest purchases most people make. To do it without representation I think is a risky move,” said Norm Pullen, a team lead and an owner at Keller Williams Realty Roanoke.
He said commission fees were always negotiable and he believes the Virginia housing market won’t see a big difference.
“It’s going to be our job as agents to communicate that value [we provide]. And it’s going to be up to the consumer, as it always has, to pick who they want to work with and what services they want to pay for,” Pullen said.
The question remains how the change could impact the housing market, especially given high inflation and high interest rates.
“In many ways it is a landmark case,” said Jonathan Everett, an assistant professor with Virginia Tech’s Blackwood Department of Real Estate. “I don’t know that anybody really knows exactly what the implications will be. I fully believe a lot of it’s going to come down to how the market reacts.”
He said the settlement is a reminder that you can and should negotiate.
“There’s balance in everything, right? No one’s going to work for free. You get what you pay for,” said Everett. “Ask around. Shop around. Talk to a variety of different agents,” said Everett. “Learn about their expertise and what they bring to the table and what services they truly provide. And ultimately, select the best option that meets your needs at a competitive price.”
A judge still needs to sign off on the settlement. If that happens, the changes will take effect around July.