As a real estate investor since 2003, I’ve been frustrated with the buying and selling process for a while. While transaction costs in most industries have dropped due to technology, real estate commissions have stayed high. Could there be collusion in real estate? After selling a property in 2017 and paying a 4.5% commission, I vowed not to sell again until rates decreased. Paying over $120,000 in commissions felt bad, especially paying the buyer’s agent. The commission rate is negotiable, but many sellers may not realize this or feel uncomfortable negotiating. My agent initially wanted 5.5%, but I negotiated it down to 4.5%. When she agreed, she made it seem like a favor, mentioning the split with the buyer’s agent. This unequal split didn’t sit right with me, so I questioned it. The buyer’s agent argued for a credit, leading to a negotiation. Feeling foolish paying a high commission while being pressured on the selling price, I realized the system was flawed. The lawsuit against real estate collusion shed light on the issue, showing how high commissions hurt sellers and buyers. The verdict could lead to fairer commissions and better outcomes for buyers and sellers. Personally, I prefer a flat fee or lower commission structure to benefit both parties. Holding onto properties longer can also be a wise strategy in this changing landscape.
