The summer home buying season is straight ahead. Will sellers get a break on real estate commissions?

The National Association of Realtors recently shocked the industry by dropping its 6% sales commission. What does that mean for home sellers this summer? Dale Vermillion fills us in today.

Dale Vermillion is the author of Navigating the Mortgage Maze: The Simple Truth About Financing Your Home. This book covers everything you need to know about securing a mortgage—all from a biblical perspective.

Industry watchers say this National Association of Realtors settlement will change how people buy houses. 

What is this settlement about?

It’s about a lawsuit that the National Association of Realtors (NAR) settled regarding real estate commissions. Traditionally, commissions have been around 6% (3% to the buyer's agent and 3% to the seller's agent), but the lawsuit argued this controlled pricing. 

The settlement will require NAR to remove language requiring the seller to pay the buyer's agent commission, allowing buyers to negotiate commissions independently.

Did the National Association of Realtors set that commission, or was it a suggestion? 

The 6% commission was a suggestion that had come out of NAR, but it had been in place for so long that there was a lot of back and forth about it over the years. The NAR did not officially set the commission percentage. 

If commissions were always negotiable, how would this settlement change things?

It will give buyers and sellers more negotiating power when working with agents because commissions have always been negotiable but many agents don't negotiate them. It will directly affect buyer's agents, who must work harder to earn their commission. 

It may also affect agents who only sell one or two houses per year, as they may decide it's not worth it anymore. But it likely won't affect full-time agents. Some buyer's agents may become listing or dual agents to have more control over both sides of the transaction.

On Today’s Program, Rob Answers Listener Questions:

• How do you know how much you need at retirement? My husband is 55 and planning on working for another 10 to 15 years, while I'm 57.
• I just inherited about $102,000, sitting in the bank. I've had it for about a month, and I don't know how to invest it or how I could earn an income from it. I'm currently unemployed since I had to take care of my husband, who was ill. We have a minor daughter. What advice do you have for how I could invest this money?
• Should I pull some money out of our IRA to put into our savings as an emergency fund? We have about $125,000 in an IRA but don't have much savings. My husband is retired and I work part-time.

Resources Mentioned:

• Navigating the Mortgage Maze: The Simple Truth About Financing Your Home by Dale Vermillion
• Rich Toward God: A Study on the Parable of the Rich Fool
• Find a Certified Kingdom Advisor (CKA)
• FaithFi App

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