H
omeownership remains a key path to building wealth in the U.S., but recent industry shifts may make it more challenging for buyers, particularly those from underrepresented communities. A 2023 federal lawsuit against the National Association of Realtors (NAR) has led to changes in real estate commission structures.

    As a result, home sellers can now negotiate with their agents about covering fees for both the seller and buyer's agents. This means that buyers will need to factor in these costs when purchasing a home. Dr. Courtney Johnson Rose, president of the National Association of Real Estate Brokers (NAREB), warns that this change could exacerbate racial wealth disparities.

    NAREB estimates that nearly two million Black mortgage-ready homebuyers have the income and credit to purchase a home but may lack the necessary savings or down payment funds for extra expenses. Homeownership rates vary significantly across communities, with 75-76% of white Americans owning homes compared to 44-45% of Black Americans.

    The new commission structures place an added burden on buyers who must now negotiate realtor fees while trying to purchase a home. This could deter some Black buyers from using realtors, particularly first-time homebuyers who may think they can save money by going it alone. However, NAREB agents are trained to help clients navigate the process and access essential resources.

    Working with a real estate agent remains crucial for several reasons: experience, negotiation skills, and speed and convenience. Agents can guide buyers through complex negotiations, provide valuable insights into local markets, and help them qualify for bank loans and government housing grants.

    The new commission structures may also lead to fewer opportunities for Black homebuyers as some sellers might only want to advertise with brokerages that can bring in buyers who can afford both fees. This could have a significant impact on the Black wealth gap, highlighting the need for targeted support and resources to help underrepresented communities achieve homeownership.