TAMPA, Fla. — A lawsuit similar to a recent antitrust case in Missouri could change the standard 6% commission paid to real estate agents and who is responsible for paying that commission.
Karen Jones of Jones Home Team Inclusive Real Estate, a Florida real estate agent, said she is already feeling the impact of the ruling locally.
Throughout his career, Jones has printed thousands of pages of documents.
“This is the listing agreement,” Jones said.
Florida real estate contracts set forth the terms and conditions between buyers and sellers regarding the transfer of real estate.
“That means addresses and types of loans accepted,” they said.
The contract contains details regarding commissions. Typically, real estate agents charge 5-6% of the sales price, and the seller pays the full commission.
“Part of that percentage goes to the agent who brings the buyer,” Jones said.
Jones said the landmark case could result in changes to who pays commission rates and how much.
The ruling was in favor of more than 500,000 home sellers who either did not consent or did not know that a portion of the fees they paid would go to the buyer’s agent.
In October 2023, a jury in Kansas City, Missouri, ruled that real estate commissions had been artificially inflated. The ruling was based on allegations that the National Association of Realtors, HomeServices of America, and Keller Williams Realty conspired to maintain inflation. The judgment reached $1.8 billion.
“It’s huge!” Jones said of the incident. “Because we have this lawsuit. We also have copycat lawsuits. Basically, we don’t know what’s going to happen.”
Starting in October, the minimum compensation offered to buyer agents on the MLS (Multiple Listing Service) will no longer be $1.00. Instead, it is now $0.
“Perceptions have changed,” Jones said. “Sellers feel they have more choice. Conversely, if you are the buyer’s agent, you can’t guarantee that the seller will pay your commission.”
Jones says the way seller and purchase agreements are traditionally done is changing.
“You have to go back decades to see why commissions were formed this way, because we wanted buyers to have their own representation. When one real estate agent represents both parties, everyone benefits. cannot be equally represented,” they said.
Jones says veterans and first-time home buyers will pay the ultimate price.
“We’re in a market with military bases. We have a lot of people who are taking advantage of VA loans, whether they’re military or veterans,” Jones said. “The VA loan says you can’t pay the commission. So what happens if a VA buyer is interested in the home and doesn’t offer a commission?”
With home prices rising, Jones says it’s also unlikely that some buyers will be able to afford the down payment, closing costs and now fees.
“You could work for months and not get paid,” Jones said.
Mr Jones also said that real estate agents would also lose out on compensation payments, arguing that there is sure to be major disruption to the real estate industry.
Meanwhile, the National Association of Realtors, a real estate lobby group, said it plans to appeal the ruling.