The Bold Move That Spells the End of California Real Estate Commissions

Death, taxes, and real estate commissions are the one constant in life. Now, one of the three could be in jeopardy, thanks to a recent court decision. Commissions in real estate have survived many attempts to devalue them through technology or some other means. 

However, California home buyers and sellers could get a discount on the industry standard six percent commission on home sales. The commission structure is usually divided by three percent to the seller's agent and three percent to the buyer's agent.

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Several hundred real estate agents met in New York recently to discuss the future of commissions following a court decision rendering one point eight billion dollars against the National Association of Realtors and other brokers. 

Barron's reports that there are nineteen additional suits against realtors. The NAR spends big money to protect their commissions, spending fifty-two million dollars in Washington DC. The lobby is second only to the US Chamber of Commerce. 

The court found that the realtors and others artificially kept commission rates at a certain level. 

From Barron's description of the case:

'The $1.8 billion jury verdict found NAR and brokerages, including Keller Williams and HomeServices of America, guilty of conspiring to keep broker commissions high. Both companies and the trade group filed motions earlier this month asking for a new trial.'

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Consumer advocates hope the court ruling will allow more competition between realtors seeking to represent buyers and sellers. The challenge continues for real estate agents as high-interest rates have slowed home sales throughout the state and country.