How D.C. real estate agent commissions could change
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Illustration: Sarah Grillo/Axios
DMV real estate agents are going to have to sing for their supper after a federal jury found the National Association of Realtors (NAR) colluded to inflate real estate commissions last October.
Why it matters: The case is putting a microscope on how agents get paid — and their value.
Catch up fast: Plaintiffs argued that NAR — and some of the largest brokerages in the country — conspired to keep commission rates high and that the system prevents sellers or buyers from negotiating those fees down, Axios' Emily Peck reports.
How it works: Sellers have typically paid 5-6% of the home sale price, and that money has been split between the buyer's and seller's agents.
- The fees are often baked into the sale price of the home, which drives the price up, Axios' Jacob Knutson reports.
State of play: The verdict hasn't led to major structural changes yet, but some real estate experts anticipate buyers and sellers will have more questions about commissions — and will try to negotiate those fees in some cases.
What they're saying: "There is a lot of uncertainty, but I do think real estate agents and brokers will do a lot more to talk about and demonstrate the value they bring to the transaction," Bright MLS chief economist Lisa Sturtevant predicts.
- DMV agent Russell Brazil anticipates the verdict will lead to fewer real estate agents. And when the labor pool shrinks, commissions will rise "as agents can charge more with less competition for their services."
Of note: NAR is under pressure for more than just the commissions — they're also facing sexual harassment suits.
What's next: NAR plans to appeal the verdict, Mantill Williams, NAR's VP of communications, told Axios in a statement.
- Another trial is expected to take place later this year.