Sorry, Home Sellers: The 6% Commission Isn’t Going Anywhere
The settlement by the National Association of Realtors fueled speculation about the end of hefty payouts for agents. History suggests that’s a misread.
Somebody’s getting their 6%.
Photographer: David Paul Morris/Bloomberg
Negotiation is an essential part of buying or selling a home. But for nearly a century, there’s been one part of the process where haggling doesn’t fly: the 5% to 6% standard commission charged by US realtors.
Now, in a dramatic turn of events, the National Association of Realtors has settled a class-action lawsuit that targeted the practice, agreeing to reforms that could cut commissions.
News outlets have generally described the case as a game-changer that will unleash competitive forces in the industry. And why not? The US standard is far higher than one charged by realtors in countries like Germany (recently 4.5%), Australia (2.5%) and the UK (1.3%).