how the real estate settlement could impact the colorado housing market
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By Nicole Fierro | Published on March 19, 2024
FOX31 is breaking down the national headlines about the big real estate settlement and how it can change home buying and selling in Colorado.
Depending on which side of the industry you ask, the perceived impact of the settlement differs.
Some say it could save consumers billions of dollars nationally a year, while others say it may not change things much. Either way, everyone acknowledges consumers have choices and bargaining power they should know about now.
Realtor commission fees at issue in settlement
The National Association of Realtors reached a major settlement with home sellers Friday to scrap longstanding rules governing broker commission fees, which will slash a key expense Americans face when selling their homes.
“Some of us have been working on this for decades, and we never thought we’d see the day when the industry would be forced to be competitive,” Consumer Federation of America Senior Fellow Stephen Brobeck told FOX31.
Brobeck sees potential for big savings for consumers, particularly buyers when it comes to negotiating commission rates.
“Commissions are likely to come down by 20% to 30%, we predict, and that represents tens of billions of dollars a year,” Brobeck said. “Moreover, there will be a closer alignment between the rates consumers are charged and the service that they receive.”
Brobeck is talking about the nationwide impact on commission rates that he finds typically range from 5% to 6% currently.
Locally, realtors and those who speak on behalf of state and local realty associations see potential for bigger changes in other areas.
“Buyers and sellers have always had a choice in the marketplace, and this is just making it more top of mind and empowering consumers to have those conversations,” Denver Metro Association of Realtors Spokesperson Libby Levinson-Katz said.
“I don’t think it’s that big of a change for us here in Colorado, but it’s important to understand it and to not misunderstand the things that go with it,” said Kelly Moye, Colorado Association of Realtors spokesperson and Compass Realtor. “Home prices aren’t going to change because of it.”
Home sellers to decide on agent commissions
Moye and Levinson-Katz think the big difference buyers and sellers should know about surrounds the buyer’s agent fees.
“Typically, sellers have paid for both their agent and the buyer’s agent, and that’s been common practice — again, those numbers have been negotiable. But the number to pay the buyer’s agent had to be something, at least had to be a dollar,” Moye said. “Now, it can be nothing, so that’s where the change comes in.”
“Under the terms of the settlement, the buyer agent will have the opportunity to ask the seller whether they are willing to contribute to the agent commission, and we believe initially that most of the sellers will say, yes, we’ll contribute to the commission,” Brobeck said.