Imagine you’re diving into the world of real estate, where the currency of choice is something we all love: free stuff. Yes, you heard it right. The industry practically floats on a river of good vibes and free services. Here’s how it usually works: Agents will cheerfully show you every house on the market, without you having to cough up a single dime upfront. Sometimes, you don’t even pay anything at all. It’s like a never-ending real estate buffet, only without the soggy deviled eggs.
Meanwhile, the MLS (that’s the fancy database where all the properties live) streams listings for free, scattering them like digital confetti across platforms like Zillow, Trulia, and realtor.com. So, you can ogle those dream homes in your pajamas, no charge. Then, when you’re ready to check one out in person, an agent will be delighted to offer you a free tour. It’s almost too good to be true! So, with all this free stuff, how on earth do agents actually get paid? And what is this “New New” everyone keeps whispering about in hushed, mysterious tones?
Let’s break this down. Historically, real estate agents got paid in a pretty straightforward way. When a homeowner (or as we like to call them, the “Seller”) decided to list a property, they’d sign a deal with a “listing agent.” This deal would state something like, “We’ll pay you a fee to sell our house,” and everyone would shake hands and pretend to understand legal jargon. Usually, this fee was around 6% of the home’s sale price. But hang on—before the listing agent could order that extra fancy cappuccino, they’d have to split the 6% with a “buyer’s agent,” giving each side 3%. This was all spelled out clearly on the MLS, like a treasure map for agents.
But now, we’ve stepped into the “New New” era. And boy, does it come with a bit more paperwork, a few extra awkward conversations, and a dash of confusion. Here's the deal: Sellers now sign two separate agreements—one for the listing agent’s fee and another for how much they’re willing to pay a buyer’s agent. This means the process has become about as simple as assembling an IKEA dresser after a glass of wine.
Picture this conversation: “Hi, Mr. Seller. You see, the amount you offer a buyer’s agent is negotiable. But, if you go too low, agents might not bring their clients around. And most buyers, well, they like to be represented by someone who’s got serious negotiating skills.” It’s all about making sure the house doesn’t end up as a wallflower at the real estate dance.
And get this—the commission details are no longer public on the MLS. So now, buyer’s agents have to do some investigative work, like detectives in a real estate mystery novel, to get the terms in writing. They also have to get a written agreement from their own clients about what they’re willing to pay, just in case the commission offered is less than the golden 3%.
Despite all these changes, here’s the plot twist: In my experience, commissions haven’t actually gone down. If anything, I’m earning more now than I did before the National Association of Realtors settlement. Why? Because the agents who are truly skilled and know how to show their value are thriving, while others are making dramatic exits from the industry. So, if you know what you’re worth and can prove it, you’re likely to keep cashing those real estate checks—paperwork and all!
Written by Todd Nation of 1 Nation Realty in Miami Beach FL
