Despite the proliferation of online aids for homebuyers, realtors still largely retain control of the market -- and their 6% average commission is usually split between the seller's realtor and the buyer's realtor.
A number of different lawsuits, however, taking aim at the system used to buy and sell homes could permanently upend the status quo that's existed between seller, buyers and realtors for a long time now.
Three lawsuits, filed in separate courts in Illinois, Missouri and Minnesota, are essentially accusing the National Association of Realtors and the nation's biggest brokerages of colluding to violate federal antitrust laws. They say that the system currently makes it extraordinarily difficult for homebuyers to get through the process without retaining the services of a buyer's agent -- which adds an unnecessary expense. By eliminating that alone, sellers could shave 3% of the commissions they have to pay to sell their houses.
The National Association of Realtors controls the Multiple Listing Services (MLS) that realtors in the United States use to show the homes they're helping sell. In other countries, where the system is different, it's unusual to have a buyer's agent -- and commissions on properties are much lower (ranging between just 1% and 4%). Seller's agents can assist both parties in the transaction and buyers can more easily find what they want to see online.
There's a lot for realtors to lose if these lawsuits are successful. One consulting firm estimates that the suits -- at least one of which is seeking class=action status -- would drive many realtors out of the game. They predict that the number of active realtors in the United States would drop from 1.36 million to around 200,000.
It remains to be seen how this will play out, but there's every possibility that the real estate industry may be changing drastically -- and that could be good news for investors and homeowners alike.
If you're considering a real estate purchase, make certain that you take the contract to an attorney for a thorough review before you sign.