Tag: house buying companies

CALIFORNIA — If you recently bought or sold a home in California, you know the seller likely paid a 5% to 6% commission. Half of that fee probably went to the listing agent and half to the buyer’s agent.

The National Association of Realtors reached a settlement agreement on Friday that changed the commission rules. The settlement, which must still receive court approval, is seen as a “landmark case” in the nation’s real estate market, but what will it mean in California?

The NAR commission rule is at the heart of the settlement agreements in California and across the nation. Under existing language, a seller’s agent must disclose the commission cut for the buyer’s agent when listing homes on NAR-affiliated multiple listing services (MLS).

For example, on public interfaces like Zillow or Realtor.com, when consumers browse homes for sale they will see a “buyer’s agent fee” — usually 2.5-3%.

In California, the seller typically pays both sides of the commission. So if a house sells for $1 million, and a 6% commission is split between a listing agent and a buyer’s agent, the seller loses $60,000 off the top. The buyer still pays $1 million.

The settlement agreement “is