Real Estate Commission Changes: What It Means for 55+ Homebuyers and Sellers

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7 minute read

Key Takeaway: As part of a $418-million settlement, the National Association of Realtors (NAR) agreed to implement changes to real estate agent commissions. For 55+ homebuyers and sellers, the settlement may mean more transparent agent pay and potentially lower commission rates.


The National Association of Realtors (NAR) recently wrapped up some big lawsuits accusing them and brokerages of keeping real estate commissions sky-high. They’ve agreed to pay $418 million over four years to settle the deal. This means they’re off the hook for claims from over a million members and many smaller brokerages.

Now, they’re not admitting any wrongdoing, but they’re changing their tune a bit. They’ve decided to ditch some policies that have been boosting agent commissions for ages. This should give sellers more room to negotiate and maybe even lower costs. This settlement could shake up the usual 5-6% commission model and might lead to new ways of paying agents. It’s a big deal that could change how buying and selling homes works for a lot of people.

But how (if at all) will it change the process for 55+ homebuyers and sellers? 55places is here to give you a complete picture of the changes on the horizon. But before we do, let’s answer a few basic questions.

A real estate agent shaking hands with a client and receiving their commission.

Alright, here’s the scoop on how real estate agents bring home the bacon. When you sell your house with the help of a real estate agent, they typically earn a commission. These commissions are a percentage of the final sale price of your home, usually ranging from 5% to 6%. So, the more your house sells for, the more your agent pockets.

Now, here’s where it gets interesting. Usually, the seller’s agent and the buyer’s agent get a chunk of that commission. The exact amount is agreed upon when a seller signs a listing agreement. So, if your house sells for $300,000 with a 6% commission, that’s $18,000 in commissions. So, if split 50/50 between the seller’s and buyer’s agents, each gets $9,000.

But hold on, there’s more! Sometimes, sellers might opt for alternative payment structures or negotiate the commission rate with their agent. And with the National Association of Realtors settlement, we might start seeing even more flexibility in how agents get paid.

Exterior view of a home in the suburbs of Ohio.

It’s a bit of a game-changer in the real estate world. MLS stands for “Multiple Listing Service.” It’s a huge database where real estate agents share information about properties up for sale. It’s the go-to hub with all the details about nearly every home for sale, from the number of bedrooms to the price tag.

So, why is the MLS such a big deal? Well, for starters, it gives agents a one-stop shop to browse available properties. And instead of driving around neighborhoods, buyers can use websites with MLS data (such as 55places.com) to see what’s out there. Also, because agents frequently update the listings, the MLS provides reliable, up-to-date information.

However, access to the MLS is typically limited to real estate agents who are members of their local association or board. Therefore, if you’re selling your home, working with an agent who’s plugged into the MLS can give your listing some serious exposure. And with more eyes on your property, you’ve got a better shot at snagging that perfect buyer.

But here’s the kicker—sellers have been sticking to this tradition of offering buyer’s agents commissions of around 2% to 3% of the final sale price for ages. Technically, they could offer nothing, but most don’t dare to go there. Why? Well, it’s all because of this thing called “steering.” See, if sellers don’t cough up the standard commission, they worry that buyer’s agents might steer their clients away from their homes. So, if you don’t play by the rules, your house might not get as much attention.

A 55+ couple at home with document and real estate contract.

So, back to the National Association of Realtors (NAR) settlement. Many sellers said that NAR’s rules about how listings are handled and how agents get paid were unfair. They claim these rules drive up commission rates and make it harder for smaller players to compete in the real estate game. So, by settling, the NAR is trying to keep things running smoothly in the real estate world.

“I believe the media has taken hold of this subject and sensationalized it in dramatic fashion. Realtor commissions have not been 6% for a long time, and the commissions paid have always been negotiable for sellers. What in truth did change is there now being a mandate for a new set of MLS rules & standards.”

Khadeejah Johnson, Senior Director of Brokerage & Partnerships at 55places.com

The NAR is making some changes to its policies to promote fairness and transparency. This includes:

  • not letting agent compensation be included in listings
  • freeing brokers from having to subscribe to specific listing services (such as MLS)
  • making sure buyers’ brokers have written agreements with their clients
A miniature wooden model of a house on a tabletop.

So, now that we understand the issue, let’s look at some of the changes coming down the pipeline. While no one is completely sure what the future of homebuying will look like, there are some educated guesses about how buying a home in the U.S. will have to evolve.

Changes to Expect

  • likely to see both sellers and buyers negotiating on commissions
  • home shoppers will have to factor in how to cover their agent’s compensation
  • sellers no longer need to disclose buyer’s agent compensation on MLS listings but can disclose it elsewhere
  • a new practice of “decoupling” where buyers and sellers pay their agents separately
  • a more competitive housing market

Possible Changes

  • some predict a drop in both home prices and commissions
  • increased competition among agents
  • the commission-sharing model could evolve into a referral fee system
  • more buyers could forgo hiring an agent or work out an alternate payment structure
  • a mass exodus of brokers from the industry
  • buyers may have to pay their agent out of pocket, a difficulty for first-time and low-income buyers
  • potential for further legal action from the Department of Justice against the NAR
A 55+ couple walking in a park in their 55+ community.

Because many 55+ homebuyers sell their family homes and become cash buyers for their next home, they may notice little difference. You may save some money as a seller but have to pay a little more as a buyer.

“Many listing services implemented changes well in advance to the NAR settlement and rulings on these cases. Those of us with experience in the industry, with the ability to pivot during these changes, are able to help navigate buyers and sellers to negotiate how commissions are being paid and by whom. Buyers are executing agreements with agents in advance to touring homes and listing agents are guiding sellers on how to strategically position their home to go to market—many times still negotiating to pay the buyers agent a cooperative commission at the time of offer. This is why it is so important to work with an experienced and local expert like a 55places Partner Agent.”

Chad Walker, Vice President of Sales and Real Estate Operations at 55places.com

Overall, if you’re 55 or older and looking to buy a home, the NAR settlement could make things a bit easier for you. By being transparent about agent pay and making brokers have clear agreements with their clients, you’ll have a better idea of what’s going on when you’re buying or selling a home.

Plus, since they’re aiming to bring down commission rates by promoting fair competition, you might end up saving some cash in the long run. Basically, it’s all about making sure the real estate game is fairer and more transparent for everyone, including folks like you who are looking for their dream home.

While the future of real estate may be uncertain, 55places is still committed to helping you start your next chapter. Whether you want to buy, sell, or both, our experienced Partner Agents will help you every step of the way. This includes helping you understand any changes in the real estate industry. Don’t put off your retirement dream any longer! Contact us today!

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ABOUT BILL NESS

Bill Ness is the Chief Executive Officer and Founder of 55places.com. His real estate career began in sales for Del Webb before becoming a sales manager for Sun City Huntley. After noticing that the industry lacked a central, reliable, and unbiased resource for active adult communities, Bill left Del Webb in 2007 to start 55places.com. Having traveled to countless 55+ communities and having interviewed residents, builders, and agents around the country, Bill is considered a leading expert on the active adult lifestyle.

Can you spot the $207,744 difference between these identical homes?

Financing is the difference!

Get the details in The 62+ Loan Homebuyers Guide.

55places Mortgage is a joint venture between Mutual of Omaha Mortgage and 55places.com.
Details here.

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