Interest rates to drop, 6% realtor commission elimination expected to help home buyers

FOX 2 (WJBK) – As spring arrives, the housing market begins to blossom. That’s why buyers — like Kevin McIntosh — are trying to find a new home by May.

“It’s beginning to show signs that it’s getting competitive,” he said. “But we’re just trying to get out there and stay on the search as often as possible.”

A few elements may make 2024 more competitive. One, is reports of interest rates dropping which will increase more prospective buyers.

The other is the National Association of Realtors announcement to eliminate its rule on the standard six percent commission for real estate agents.

“I think it is going to affect the industry,” said Briyana Jordan. “It’s going to change the industry. I think it’s going to actually bring realtors who work full time. it’s going to bring them more to the forefront, and the people who only do this part time, they might fall off.”

Jordan is a relator with Arterra Luxe. She says commissions won’t exactly be done with, but will be offered on the backend of a sale in a separate contract between parties.

It ultimately won’t be published.

“I don’t think we’ll see a change right away,” she said. “I think it will probably be next year because I don’t even think a lot of sellers are even aware of this.”

Jordan believes the move will force realtors to have a better relationship with their clients.

The elimination came after a court settlement forced the National Association of Realtors to pay $418 million in damages from an antitrust suit.

Reports show real estate commissions in America reach $100 billion annually.

Housing experts believe the commissions could drop by a third.

Keller Williams realtor Tyrone Player II believes this move will improve transparency in home buying and selling.

“It’s just that we have to be more transparent,” he said. “So what this does is great for the consumer – and even great for realtors in that everything is put up front. So as far as the commission goes, those discussions should be up front.”

The elimination commission still needs to be ratified. It’s expected to happen in mid-July.