F
ort Wayne's Mary Sherer has spent over three decades helping homebuyers navigate the complex world of real estate. However, a 2024 settlement has introduced a new dynamic to her work, making her feel like a rookie again. The National Association of Realtors agreed to pay $418 million to settle a lawsuit alleging antitrust laws were broken by conspiring with brokerages to inflate commissions paid by home sellers.
Prior to the change, home sellers worked with their agents to decide on a commission split with buyer's agents. This upfront disclosure created an incentive for seller's agents to agree to high enough fees to motivate buyers' agents to book showings. For example, if a 6% commission was split between seller's and buyer's agent, each would receive $6,000.
"It worked really well," Sherer said of the old system. "The change has been a learning curve." New regulations now require buyers to sign exclusive contracts committing to work with a real estate agent for a specific period. Although buyers will often end up paying their broker, the new rules don't prevent sellers from offering to pay that commission.
Larry White, owner of Liberty Group Realty, notes that agents' fees have always been negotiable. "Some people assumed the seller always pays (the buyer's agent's fee), but that's not necessarily the case." White emphasizes that agents must prepare clients upfront about who pays the fee and how it may become a sticking point during negotiations.
The National Association of Exclusive Buyer Agents has expressed concern that more agents will represent both buyers and sellers, potentially compromising their loyalty to each party. Lynn Reecer, a local broker, prefers exclusive arrangements between buyer's agent and client, citing the analogy of attorneys representing each side paying for their own services.
Evan Riecke, owner of Encore/Sotheby's franchise, believes the fee change will weed out agents who can't demonstrate value to clients. He's been busier since buyers are required to sign exclusive agreements with brokers, but notes that this has caused buyers to hesitate before signing a document with an agent they've never met.
Sherer offers one-day contracts for potential buyers viewing specific properties, while Riecke signs contracts applying to only one property for first-time clients. Both agents emphasize the importance of establishing strong client relationships and demonstrating value to attract and retain clients.
