The National Association of Realtors recently agreed to settle a big lawsuit that questioned how real estate agents are paid — and who foots the bill.

The big picture: If approved, come summer, agents won't be able to make offers of compensation in the Multiple Listing Service, the database where real estate agents post homes for sale.

Why it matters: The seemingly small change is causing major confusion.

How it works: Sellers and their broker currently 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.

Buyer agreement forms are already required in 20 states and Ohio lawmakers are pursuing legislation that would codify the practice here.

• Generally, these forms help buyers gain a better understanding of what services their agent will provide — and how much it'll cost.

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.

What they're saying: The Ohio Realtors Association, which represents more than 30,000 agents in the state, agrees buyers will benefit from more detailed discussions about what services their agents will provide and for what fee.

• But the organization largely brushed aside predictions of massive, industry-wide disruption.
• "Honestly, the consumers may not notice too many changes," Ali Whitley, the association's president, tells Axios.

The fine print: Whitley argues buyers' agents have already long had the flexibility to negotiate alternative compensation structures such as flat-fee representation, models that haven't exactly caught on.

• She also noted the settlement won't forbid agents from listing commissions outside the MLS, for instance, on brokerage websites.

Between the lines: Many cash-strapped first-time buyers aren't in a position to pay their agent out of pocket, which could make homes that include a compensation for their agent more appealing.

• For that reason, sellers aren't entirely off the hook.
• Sellers will likely offer concessions to cover buyer agent costs, Faron King, a VP with NAR, tells Axios.

What's next: Itzhak Ben-David, the academic director of OSU's Center for Real Estate, says he expects brokerage earnings to decline as commissions eventually become more closely linked to the effort put in by an agent.

• "The commissions are going to be closer to the time it actually takes to sell the houses," he tells Axios.

The median wage for Ohio real estate sales agents was $40,000 in 2023.

The big picture: Most observers believe commissions will fall, possibly down to 1%–1.5% per agent on each side, Axios' Emily Peck reports.

Reality check: Real estate agent pay is already pretty low in Ohio, at least compared to other states.

• The only five states with lower median wages than Ohio are Kentucky, Arkansas, Idaho, Louisiana and Nebraska.

💵 OSU supports the settlement from top collegiate athletics conferences that will allow student-athletes to be paid directly by their schools. (Lantern)

🥃 A bourbon lounge and wine bar will open in two Dublin cabins that date back to the 1830s. (WCMH-TV)

🚌 Greyhound and Barons Bus will look for another terminal after agreeing to stop pickups and dropoffs at a troubled North Wilson Road site. (WOSU)

Tyler snapped this photo along a bike path near OSU's Newark campus.

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