Buying a house — the most expensive purchase of your life — fundamentally sucks.
The industry that facilitates real estate transactions is far more vast and opaque than most people expect when they decide to begin the buying process. And you don’t have any choice but to enter the labyrinth if you want to unlock that ultimate badge of adulthood, homeownership. It is emotional and full of paperwork and tends to making buyers feel, undeservedly, stupid.
Much of that is by design, reinforced by the National Association of Realtors, a mega trade group with monopoly-like control over US real estate.
There’s good news and bad news on the horizon, though.
The good news, by some accounts, is that antitrust authorities have forced NAR (pronounced “nahr” by folks in the industry) to loosen its grip on agent commissions, which should, eventually, reduce the costs buyers and sellers have to pay. It could also introduce new methods of home buying and selling that bypass traditional agents.
Starting this Saturday, the days of the standard 6% commission — two to three times what agents make in other developed economies — are effectively over.
Sellers, who historically have paid both the listing agent and the buyer’s Realtor, will be on the hook for their agent’s fee. Buyers and their agents will negotiate a compensation plan upfront.
“It’s a partial deregulation of a marketplace that was regulated not by government, but by the industry,” said Stephen Brobeck, senior fellow at the Consumer Federation of America, a nonprofit advocacy group. “In the long run, it’s going to be a very good thing.”
But it will take time to unwind the system that the NAR spent decades building — a system that keeps commission information largely out of public view — and fighting in court to protect.