Subject: Re: NAR settles realtor lawsuit
Like many of you, we have bought and sold real estate...I do not see much changing going forward for the vast majority of real estate transactions... In my view it is worth some percentage so as to find qualified buyers and to deal with the multitude of issues that can arise.

Certainly these are reasonable observations.
But it comes down to what sort of number makes sense.

It's pretty easy to compare the US to other countries without an equivalent of the MLS service / cartel. Other places still get their houses sold.

In the UK, the average 2023 real estate commission was 1.18% plus sales tax. That is paid by the seller. It seems that most buyers don't pay a commission, unless they have chosen to hire a buyer's agent. So, though I agree with you that paying commissions makes good sense and provides real value, the US levels seem very odd by comparison.

No matter where you live, the situation you're used to makes sense and other things seem strange.
For example, to a Canadian the US idea of a bank charging "points" for mortgage initiation (a percentage of mortgage value) up front as a fee is unbelievable.

(though the MLS commission split practice is traditionally quite similar between the two countries--in both, the brokers and agents are making out like bandits)


The above is a long way of saying real estate brokers are not going out of business in my estimation. The strongest and best will find ways to adapt.

Again, this makes sense...but I think it may well settle at a much lower commission level, and a much lower overall industry revenue number. The number of agents in the US, and the aggregate fees they charge, just don't make sense. It's a lucky historical quirk which might last, or might not. I think the average US brokerage is worth materially less than it was, and it's going to be a permanent hit. Since enforcement against cartel-like corporate arrangements in the US has been so incredibly weak in the last few decades (the main reason I invest there) it may only be a hit of, say, 30%. Or 10% or 50%.

Jim