Are Broker Commissions Too High?

“Rebate bans that cause home buyers to spend thousands more, sometimes $10,000 more, really ought to be challenged,” Mr. Ryan said. “Firs...

“Rebate bans that cause home buyers to spend thousands more, sometimes $10,000 more, really ought to be challenged,” Mr. Ryan said. “First-time home buyers, home buyers who are trying to move to a new state for better economic opportunity, for better schools for their kids, whatever circumstance a home buyer is in, we support them.”

REX is also exploring potential legal action in Louisiana, Missouri and Tennessee, where similar anti-rebate laws remain on the books, Mr. Ryan said.

But some brokers say that the current commission fee structure exists to protect both buyers and sellers, because each party’s agent comes to a home sale representing the client’s best interests, whether on the buyer’s or seller’s side.

Dawn Pfaff, president of State Listings, Inc., a nationwide multiple listing service and real estate platform, said changes to the status quo would hurt homeowners and home buyers.

“These lawsuits are frivolous,” she said. “It’s the biggest transaction of their life, and homeowners don’t necessarily know how to do it. Our system in America affords them the opportunity to be protected.”

While REX’s case is directed at the state of Oregon, most of the lawsuits have been filed against the National Association of Realtors, the umbrella trade organization of real estate licensees. The association and its local subsidiaries exercise control over the majority of the 600-plus multiple listing services in the U.S., the databases used to connect home buyers to sellers.

In April 2019, the Justice Department began investigating whether or not brokers were steering their buyers to homes that offered them larger commissions, thus cutting out brokers who might be willing to collect less out of the process.

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Newsrust: Are Broker Commissions Too High?
Are Broker Commissions Too High?
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