In the wake of a groundbreaking NAR lawsuit, the debate rages: should real estate commissions be ‘uncoupled’ to benefit buyers?”  

A recent NAR Lawsuit verdict against the National Association of Realtors (NAR) awarded $1.78 billion to home buyers who alleged that the NAR’s commission structure is anticompetitive and drives up home prices. The verdict has sparked a debate about the merits of the commission system, and some have called for it to be “uncoupled” so that buyers pay their own agent directly. 

Proponents of uncoupling argue that it would lead to lower commissions and lower home prices. They argue that the current system, where sellers pay the commissions for both the buyer’s and seller’s agents, creates a conflict of interest for buyer’s agents. Buyers’ agents are incentivized to find homes that sell for as much as possible, because their commission is a percentage of the sale price. 

However, there are several reasons why uncoupling commissions would likely harm buyers, especially first-time buyers. 

First, uncoupling commissions would make it more difficult for buyers to afford a home.

According to the National Association of Realtors, the median sales price of a home in the United States is currently $428,700. If a buyer’s agent would be paid 3% commission on a home at that price would be $12,861. Many buyers, especially first-time buyers, do not have that much cash on hand. 

If commissions were uncoupled, buyers would have to pay their own agent’s commission out of pocket.

This would add a significant financial burden to the home buying process, and could make it impossible for some buyers to afford a home. 

Second, uncoupling commissions would reduce the quality of representation that buyers receive.

Buyer’s agents are currently paid on a contingency basis, meaning they do not get paid unless their client buys a home. This incentivizes them to work hard to find the best possible home for their client at the best possible price. 

If commissions were uncoupled, buyer’s agents would have to charge their clients upfront fees.

This could lead to a decrease in the quality of representation that buyers receive, as agents may be less motivated to work hard for their clients if they are already getting paid. 

If commissions were uncoupled, some sellers may choose not to list their homes in the MLS.

This would make it more difficult for buyers to find homes, and could reduce competition among sellers, which could lead to higher home prices. 

Overall, uncoupling real estate commissions would likely harm buyers, especially first-time buyers. It would make it more difficult for buyers to afford a home, reduce the quality of representation that buyers receive, and make it more difficult for buyers to find homes. 

COMMISSION DISCLAIMER: The commission examples provided are for illustration only and do not represent actual rates. Real estate commissions are negotiable and not set by law. Professionals should independently determine appropriate commissions based on services provided and their marketplace. Professionals have sole responsibility for transparently communicating their fee structures to clients in compliance with applicable laws and regulations. These examples do not constitute financial, legal or real estate advice. 

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