How the 6% Real Estate Commission Became Endangered

The 6% real estate commission, a mainstay of US home sales, is under threat like never before. The National Association of Realtors has agreed under legal pressure to make changes to its longstanding rules that could alter how fees are apportioned to buyers’ and sellers’ agents — a system that critics say makes commissions much higher in the US than elsewhere. The group’s settlement to end a class-action lawsuit came after a Missouri jury found that it and others had colluded to keep the fees high. On April 5, the Justice Department received the go-ahead from an appeals court to reopen its antitrust probe of the Realtor group, a move that’s likely to increase pressure on the industry. But 6% commissions won’t go away overnight, experts say, and it’s unclear how much leverage consumers will have in what will now be a negotiation over the fees.

The seller typically agrees to pay a 5% to 6% commission on a sale of their property. Once a sale is completed, the seller’s agent then splits the commission with the buyer’s agent. This system is largely unique to the US, and it’s tied to the Realtor association’s control of many of the country’s so-called multiple listing services, which aggregate properties available for sale in a region.