Lincoln Realtor says change to commissions will add ‘substantial’ cost for homebuyers

LINCOLN, Neb. (KLKN) – A settlement in a federal court case will change the way Realtors are paid and could make it more expensive to buy a house.

Right now, each time a house is sold, the commission is paid to the seller’s agent, who decides how much to give to the buyer’s agent.

That system sparked federal lawsuits, with critics saying the commissions were excessive and unfairly benefited the seller’s agent over the buyer’s agent.

So the National Association of Realtors agreed to a settlement. If it’s approved, the seller’s agent wouldn’t have to pay commission to the buyer’s agent.

“This, in effect, is going to allow quite a bit more transparency on who is getting paid what,” said Matt Mick, a Realtor at Lincoln Select Real Estate.

The goal of the settlement is to make it cheaper to buy and sell a home and to give the customer more say in negotiations.

But Mick thinks it may have the opposite effect on first-time homebuyers.

“Buyers’ agents are going to have a discussion with their client and say, ‘Hey, you’re going to have to pay for my service now,'” he said. “And that service is going to add a substantial cost to homebuyers. Some homebuyers simply don’t have the money to do that. Many have just enough to buy a home, so they’ll have to save up longer.”

And Mick said he wouldn’t be surprised if some agents drop out of the business because of this.

The settlement still needs to be approved by a federal judge.

If it is, the change will go into effect in July.