I will do my best to summarize, and how it may affect you. I urge you to call me and discuss if you want more details, I love talking about real estate, even the legalese! It is up to us as real estate brokers and agents to prove our value and our worth. There has been plenty of false information put out by many media outlets the last 6 weeks, they seem to copy each other and not due actual research, so please don't believe everything you read.

I wrote a lengthy article late last year after the October verdict that started this all, please see Realtor's Commission Verdict | Saint Louis Real Estate | Gary Hoeferkamp (ihouseelite.com). This gives a good overview of how I felt, and still feel, regarding the original verdict. Alot has happened since then! The NAR (Nat'l Assn of Realtors) settled with the plaintiffs on March 15, 2024 to pay $418 million of the original $1.78 billion judgment, which now protects the vast majority of brokerages from further lawsuits. Several large brokerages have settled separately with the plaintiffs, adding $55M to $83M each to the pot totaling $626 million at my last count, that homesellers across the country can claim a piece of, with certain conditions, like having paid a broker, and sold in the last 4 to 10 years. You may have already received a postcard about filing a claim. Lots of claim stuff to address, but with the year+ timeframe, I will elaborate at another time. The deadline is May 9, 2025 to file your claim Home | Burnett et al. v. The National Association of Realtors et al. (realestatecommissionlitigation.com).

The main news stories that you are reading about the last few weeks is how our industry will change. Our local Assn is already working on major changes to our seller and buyer representation agreements, and how we get paid. The sale contract and closing process is not changing very much. Beyond the funds being set aside for the class action claims, there are 2 main requirements in the settlement:

• We need to have an agreement signed with every buyer prior to showing them a single property, and
• We cannot list the fee amount in our MLS, if any, that the seller is willing to pay the Buyer's broker. Hence, it will no longer be on Zillow or Realtor.com either, starting this summer.

How exactly this changes the normal fee structures is yet to be determined. Realize that all kinds of articles and media have and will speculate on this, just know that we have state licensing laws and many industry rules to follow that guide our industry and protect buyers and sellers, plus adapting to the new changes. How all this will look in a year or two is mainly up to you as the buying and selling public - our clients; and the brokerage industry - us; to keep the process as smooth and satisfactory as possible - not the University professors or economic experts that are being quoted so often recently.

So will buyers have to pay their agents now? If so, how much? The market will determine both. I cannot answer, no one can right now, with certainty. (1) I can tell you that sellers are still allowed to offer Buyer's brokers any amount they wish, it just cannot be mentioned in a forum like the MLS where other brokers are advertising. Individual companies will be able to advertise the Buyer's broker offer on their websites, in emails, social media, etc. But an alternative site to the MLS is not allowed for this purpose. (2) I do not believe the broker's pay will be affected very much. This is a touchy subject, as we are cautioned not to discuss commission or fee rates per the anti trust rules (funny that's still what we got sued for), but consider that buyer's agents are working harder than seller's agents right now. Buyers truly benefit from good representation. Perhaps with all the attention on our commissions they will moderate a bit. I have tracked time spent with buyers and sellers. I spend many hours on each client doing many items during the process, much of which clients are not even aware of. Add in "non-billable" time, such as general advertising, bookeeping, and software upkeep (or pay someone to do that), plus of course all the expenses of running a small business, and arriving at an hourly charge rate so people understand what my time is worth, although doubtful the industry starts charging by the hour, except in isolated cases. Don't forget all the time spent with clients who end up not buying or selling, that is a large factor, and difficult to avoid. Will buyers "a la carte" the process? Also unlikely. Pay to see a house...pay for a price analysis...pay to write an offer. It would not be effective "representation", and buyers will sour quickly when their offers are not going thru, and they are out $1000, $2000 and more.

Will buyers go straight to the seller's agent? This has happened on occasion throughout my 34 year career. I imagine this may increase, so I will be discussing this with my sellers closely and how I would handle it, fee-wise and representation-wise. These buyers may think they have an "in" with the seller that way, but that is not really the case. They tend to be viewed as a less serious/ less committed buyer, and without good representation, their offers generally are much weaker and rarely win in competition. If there is no competition, they will have a fair shot at it, but will likely miss out on the nicer, faster selling homes.

Will the buyers go straight to unlisted sellers? This also has happened on occasion in my career, but the percent of For Sale By Owners have dropped in half the last 30 years, now around 8% of all sales, and many of those know each other. I feel the big reasons are buyers and sellers not knowing how to go about it, lack of trust in the other party, selling too low/ paying too much, too much liability, too much risk. Buying and selling a house or condo is a huge thing! You don't realize how much there is to it, and how much can go wrong...until it does. That's what highly experienced agents like me bring to the table, knowing these things and guiding you thru the minefields of selling and buying real estate. If you think there is nothing to it, you do not fully understand the process and all the potential pitfalls.

Will commissions be more negotiable? Somewhat, especially in a tight market like now. There are situations it just makes sense - multiple transactions, higher price homes, past clients, hot locations. This will be case by case, and up to each broker and agent, as it always has been.

One change is sure - the fee agreed upon between buyer and Buyer's broker has to be specific, and cannot be added to from the seller. In other words, if the seller is offering 2.7% to the Buyer's broker, and the buyer's agreement with their agent calls for 2.5%, the broker must decline the additional .2%, or perhaps have the buyer request it as a closing cost credit. That brings up concessions: yes, the buyer can request closing cost credits as part of their offer to offset or pay their own broker. Lender rules can limit this amount (this is being discussed right now), but I expect to see this in low down payment deals, especially VA financing that will not allow the buyer to pay their broker, even if the seller is not offering it.

The longer I am in this business, the more things I see that can go wrong. Potential liabilities are big and increasing. You have one best shot as a seller when you hire an agent and go on the market. Screw it up and you lose alot on the sale price, or having to deal with perceived property defects, or a lawsuit threat, even environmental issues after the sale can haunt sellers. Buyers can spin their wheels for many months, even years. It is difficult even with a highly experienced agent to get the right house under contract at a price and terms acceptable to the buyer. Professional guidance and risk reduction are big deals. It takes years for an agent to become an expert in guiding and protecting you as a seller or buyer. There are so many twists and turns that can arise in a sale process, it will make you queasy if I told you about only 10% of them. Good agents have value, and are worth paying for.

Thanks for making it this far down. I will continue monitoring this situation and updating you the next few months. The changes will be in place mid to late summer, and I look forward to helping you sell or buy soon!