The old way of selling a house in America is basically dead. You probably remember how it used to work: you’d hire an agent, sign a contract, and agree to pay a 5% or 6% commission. Half of that money went to your agent, and the other half was "offered" to the buyer's agent. It was the standard. It was just how things were done.
Then came the real estate commission class action lawsuits.
Specifically, the Sitzer/Burnett case in Missouri changed everything. A jury decided that the National Association of Realtors (NAR) and several massive brokerages had essentially conspired to keep those commissions artificially high. We aren't talking about a small fine here. We're talking about a $418 million settlement from the NAR alone. Other big players like Keller Williams and Anywhere Real Estate (the parent company of Coldwell Banker and Century 21) had to shell out millions too.
Why the Real Estate Commission Class Action Happened
For decades, the Multiple Listing Service (MLS) acted as the gatekeeper. If a seller wanted their home to appear on the sites everyone uses—Zillow, Realtor.com, Redfin—they had to play by the rules. One of those rules was the "Participation Rule." It required sellers to offer a pre-set commission to any buyer’s agent who brought a client to the table.
Critics, and eventually the courts, argued this created a massive conflict of interest.
Think about it. If you’re a buyer’s agent and you see two identical houses, but one offers a 3% commission and the other offers 1%, which one are you more likely to show your client? It’s called "steering." The plaintiffs in these lawsuits argued that this practice forced sellers to pay for a service (the buyer’s agent) that they didn't even hire.
It felt like a rigged game. Honestly, it kind of was.
The logic from the NAR was always that this "cooperative compensation" made homeownership more accessible. By having the seller bake the buyer’s agent fee into the home price, the buyer didn't have to come up with extra cash at closing. It sounds helpful on paper. But the court didn't buy it. They saw it as a way to prevent price competition.
The New Rules of the Game
As of August 2024, the landscape looks completely different. There are two "big" changes you need to know about if you're even thinking about buying or selling a home in 2026.
First, commissions are gone from the MLS.
That little field that used to say "Buyer Agency Comp: 2.5%" is now a blank space. It’s forbidden. Agents can’t even use the "remarks" section to hint at it. If a seller wants to pay a buyer's agent, they have to negotiate that off-MLS. It’s no longer a default setting.
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Second, if you’re a buyer, you must sign a written agreement with an agent before you even go look at a house.
No more casual tours. No more "I'm just looking." That agreement has to specify exactly how much that agent is getting paid. If the seller refuses to pay that fee, you—the buyer—are on the hook for it.
This is a massive shift in psychology. For years, buyers thought their agents were "free." They weren't, of course; the cost was just hidden in the sales price. But now, that cost is front and center. It’s an out-of-pocket consideration.
What This Means for Your Wallet
Is the real estate commission class action actually saving people money?
It depends.
If you’re a seller, you have way more leverage now. You can say, "I’m not paying the buyer's agent a dime." On a $500,000 house, that saves you $12,500 to $15,000 right off the top. That’s a huge win. But there’s a catch. If you refuse to pay, you might limit your pool of buyers. Many first-time buyers are already stretching every penny just to cover the down payment and closing costs. If they suddenly have to find another $15,000 to pay their agent, they might just skip your house entirely.
Buyers are in a tougher spot.
You now have to interview agents like you’re hiring an employee—because you are. You have to ask: "What do I get for 2%? Can I just pay you a flat fee of $5,000 instead?" We are seeing a rise in "a la carte" services. Some agents might charge $500 to write an offer and $1,000 to manage the inspection, rather than taking a percentage of the sale.
Surprising Nuances of the Settlement
One thing people get wrong is thinking that commissions have been "lowered." They haven't. The settlement didn't set a price. It just removed the mechanism that kept them uniform.
In some markets, we’re seeing "commission creep" where sellers still offer the same 2.5% or 3% because they're scared of losing buyers. In other places, like high-demand parts of California or New York, sellers are cutting the buyer's side to zero and the houses are still selling in three days. It’s a total Wild West.
And then there's the Department of Justice (DOJ).
The DOJ has been watching this like a hawk. They’ve suggested that they don't just want the "offer" of compensation removed from the MLS—they want "decoupling" entirely. They want a world where sellers cannot pay buyer agents at all, forcing every buyer to negotiate their own fee. We aren't there yet, but the door is open.
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The Experts' Take: Is the Industry Shrinking?
I spoke with several veteran brokers who think this is the "Great Culling" of real estate agents.
When it was easy to get a 3% commission just for opening a door with a keycode, everyone and their cousin had a real estate license. Now? You have to prove your value. You have to explain to a buyer why you’re worth $15,000 of their hard-earned cash.
The number of active Realtors is already starting to dip. The part-timers are moving on. The pros who actually know how to negotiate, handle complex disclosures, and navigate tricky appraisals are the ones staying. Honestly, that’s probably a good thing for the consumer.
Real-World Examples of the "New Normal"
Look at a typical transaction in 2026.
A seller in Austin, Texas, lists their home for $600,000. Under the old rules, they’d expect to pay $36,000 in commissions. Now, they might offer 2.5% to their own listing agent ($15,000) and tell the buyer's agent, "I'll give you $5,000 toward your fee, but the buyer has to cover the rest."
The buyer’s agent has a contract with the buyer for 2%. That’s $12,000.
The buyer gets $5,000 from the seller, so they have to pay $7,000 out of pocket.
Or, the buyer asks for a "closing cost credit" in the offer to cover that $7,000.
It’s a giant game of musical chairs with money. It’s more transparent, but it’s also way more complicated.
Misconceptions You Should Ignore
You’ll hear people say that home prices will drop because of the real estate commission class action.
That’s unlikely.
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Home prices are driven by supply and demand, interest rates, and inventory. While a seller might save 3% on commissions, they aren't necessarily going to lower their asking price by 3% just to be nice. They’re going to try to pocket that savings. The "savings" isn't going to the buyer; it’s staying with the seller.
Another myth is that you don't need a buyer's agent anymore.
You can certainly go it alone. But listing agents represent the seller. If you walk into an open house and start talking to the listing agent, remember: their job is to get the highest price for their client, not you. Unless you’re an expert in local zoning, structural integrity, and contract law, "going rogue" can be an expensive mistake.
Actionable Steps for Today's Market
If you are entering the market right now, you cannot afford to be passive. The "standard" is gone. Everything is a negotiation.
For Sellers:
Don't feel obligated to offer a specific percentage. Ask your listing agent for a "net sheet" that shows three different scenarios: one where you pay 2.5% to a buyer's agent, one where you pay a flat $5,000 fee, and one where you pay zero. Look at the data. If homes in your neighborhood are sitting for 60 days, you might need to offer a carrot to the buyer's side. If they're selling in a weekend, you have the power.
For Buyers:
Interview at least three agents. Don't just ask about their experience; ask about their fee structure. Will they work for a flat fee? Will they credit back part of the commission if the seller pays more than their agreed rate? Get everything in writing before you sign that mandatory representation agreement. Make sure there is an "out" clause if you don't like the service you're getting.
For Everyone:
Read the fine print on "Seller Concessions." In many cases, you can use these concessions to pay for your agent's fee, but it has to be structured correctly so it doesn't mess with your mortgage loan-to-value ratios. Talk to your lender early. Some loan types, like VA or FHA, have strict rules about who can pay for what.
The era of the "standard 6%" is over. The real estate commission class action didn't just end a business practice; it started a conversation that was 50 years overdue. Whether you're buying or selling, you're now in the driver's seat. Just make sure you know how to drive.
Key Takeaways for Your Next Move:
- Negotiate Everything: There is no "standard" commission rate anymore.
- Watch the Paperwork: Buyers must sign a representation agreement before touring homes.
- Check the Math: Sellers should calculate their "net" profit under various commission structures before listing.
- Ask About Credits: Buyers can use seller concessions to cover agent fees, but it requires specific contract language.
- Value Over Cost: A cheap agent who doesn't know how to negotiate can cost you more in the long run than a professional with a higher fee.