Realtor pay shakeup
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With Houston's spring homebuying season in full swing, we thought we'd take a look at what the recent major lawsuit involving Realtors means for the sale or purchase of your house.
Why it matters: The seemingly small change, which a court preliminarily approved in April, is causing major confusion.
Driving the news: The National Association of Realtors recently agreed to settle a big lawsuit that questions how real estate agents are paid — and who foots the bill.
By the numbers: April was a month of growth for those in the Houston home-purchasing market, according to the Houston Association of Realtors.
- Realtors sold more than 7,900 single-family homes in April, a 9.2% increase from April 2023.
- Overall property sales topped $4 billion in the Houston area last month, with an average single-family home price of around $437,000.
The big picture: If the settlement is approved, come summer, agents won't be able to make offers of compensation in the Multiple Listing Service (MLS), the database where real estate agents post homes for sale.
How it works (currently): Sellers and their broker negotiate a fee, and that broker decides how much profit they want to share with the buyers' agent.
- That number is advertised in the MLS listing, and the seller pays both agents from the home sale earnings.
- Many are concerned this causes buyers' agents to steer clients toward homes that offer them higher commission.
If the settlement is approved, offers of compensation will not be listed in MLS. Buyers and their broker will negotiate how much the broker should earn — and how they'll get paid, antitrust lawyer Brian Schneider says.
- Increased transparency around agent profits could lead to more competition, he says.