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Stephen Brobeck: Why decoupling commissions failed to lower housing costs
The op-ed says rates stayed near 5% to 6% as buyers expected seller-paid real estate commissions, limiting negotiation after the settlement.
What happened?
Importantly, the industry was highly motivated to maintain 5% to 6% rates. The sale of about 4 million homes each year by about 2 million licensed agents provided the latter with a huge incentive to maintain relatively high rates. Would negotiated commission rates lower housing costs?
This issue is obscured by the widespread agreement that buyer commissions are currently included in home sale prices, where they can be easily financed. However, the undeniable fact is that if commissions were to decline from 6% to 4%, housing costs would be lower —$8,000 less on the sale of a $400,000 home. This potential cost saving makes it worthwhile to continue working toward a more price competitive housing marketplace – one where rates are not uniform but reflect the competence and efforts of individual agents. Stephen Brobeck is a senior fellow with the Consumer Federation of American and has researched brokerage issues for three decades. Since early 2025, he has undertaken this research as a senior fellow at the Consumer Policy Center, a consumer think tank. This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners. To contact the editor responsible for this piece: [email protected]
Source Reference
Originally published by Stephen Brobeck
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