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[quote=Anonymous]Here are interesting paragraphs from WSJ on change in R/E commissions:

If the settlement is approved by a federal court, listings of homes for sale in most parts of the country would no longer include upfront offers to buyers’ agents starting in mid-July, and buyers would be able to negotiate compensation upfront with their agents. The settlement money will be distributed to recent home sellers nationwide.

Buyers are likely to be more price conscious when selecting an agent and might opt to save money by not using an agent at all, or by paying their agent a smaller fee in exchange for limited services. For example, a buyer could pay an agent to put together an offer and review an inspection report, but not to accompany the buyer on home tours.

The changes also require many real-estate agents that work with buyers to sign agreements with their clients about what services they will provide and how much they will be paid.

If fewer buyers use their own agents, that could push some agents out of the industry and lead to a decline in NAR’s membership. NAR has 1.5 million members, known as Realtors. Ryan Tomasello, a real-estate industry analyst with Keefe, Bruyette & Woods, has predicted that the lawsuits could eventually lead to a 30% reduction in the $100 billion that Americans pay annually in real-estate commissions and reduce Realtor head count by more than half.

The new commission structure could pose challenges for first-time buyers and others who are struggling to save for a down payment. Because the buyer’s agent’s commission has long been baked into the sale price, the buyer was able to finance that cost over the length of the mortgage instead of having to pay it upfront at the closing table.

Going forward, sellers can still offer to compensate buyers’ agents, but in most markets they won’t be able to put those offers in the home listing. If buyers don’t want to pay for their agents out of pocket, they could ask for the seller to cover the cost of the buyer’s agent. Sellers are less likely to agree to that in a hot housing market, however.

It is possible that little changes for consumers in the near term because many sellers are used to including the cost of a buyer’s agent in their sale price. But over time, new brokerage business models could emerge that make it easier for buyers to choose low-cost options.

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