Here’s Why the New Broker Agreements Will Fail

We might never stop brokers from colluding to steer us into ever more expensive homes, but the new Buyer Representation Agreement could kick off a wave of innovation based on consumer—not broker—cooperation.

A graphic illustration of the home buying process.
As competition in the real estate market heats up, as many as 30 percent of NAR’s 1.5 million brokers and agents may lose their jobs. Getty Images/Unsplash+

If you’ve clicked on a TikTok recently about “homes for sale,” you’ve seen the videos: Realtors belittling consumers who think they can handle buying a house on their own, boasting about their dealmaking prowess, and crowing that even though the Department of Justice won a guilty verdict against the National Association of Realtors for conspiring to inflate commissions—and $1.8 billion in damages—”nothing will change.” Yet something is changing. 

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Even though NAR admits no wrongdoing, it counter-offered $418 million to all homebuyers since 2022 and a minor change to the rules it calls “Cooperative Compensation”—or, more simply, “Cooperation,” the process by which sellers pay buyers’ brokers through their escrow. Last week, a judge gave NAR’s offer a provisional green light, and from mid-August, brokers will no longer hide their commissions in NAR’s affiliated Multiple Listing Service (MLS). Instead, they’ll have to publish their fees and services on their websites and obtain written agreements from house hunters explicitly stating what services they’ll provide (from home discovery and negotiation to closing)—and how much they’ll be compensated—before working with you. TikTok brokers say this is how good brokers have always operated. NAR says commissions have always been negotiable, sometimes down to zero percent. It even boasts that Cooperation between buyer and seller agents isn’t going away—it’s the American way! 

Some brokers admit there will be pain. Every property will now have a commission target on its back, and many consumers will negotiate every last detail of the Buyer Representation Agreement. As competition heats up, as many as 30 percent of NAR’s 1.5 million brokers and agents may lose their jobs, but the cozy broker club will always survive. Nothing will change. 

Can this really be the end of the antitrust road? How do we create competition if broker collusion continues to be an inescapable part of real estate? 

Digital consumers already know the answer, and while fee disclosure helps, it’s only the beginning. For busy digital natives rooted to our keyboards, with limited money and time to educate a broker about our tastes, budget, and schedule, the secret to getting better deals and data is clear: Put the dealmaking right into consumers’ hands. LinkedIn does it for job searches. Reddit and do it for stock tips. Airbnb does it for hotel stays. Hundreds of other apps have redefined the roles of intermediaries: Amazon disintermediated retail; Uber, taxis; Robinhood, investments. So why hasn’t real estate gotten the disintermediation treatment? 

The stakes are certainly high for consumers. Commission on a million-dollar home is nearly a year of salary. But the 100-year-old monopoly has conditioned us to believe that broker knowledge in local markets is unexcelled. No network could possibly be as smart as your local broker, who is likely a relative or friend. Do you really think you can top Aunt Sally? 

As anyone who’s sold on their own knows, it’s not rocket science. Listings for homes selling between the median (about $418,000) and a luxury home (from $1.6 million to as much as $3.6 million on the coasts) don’t get a lot of love from brokers because the commission’s too low. The key to making brokers work hard is more commission, not less. That’s why most listings are dull sales brochures, not a source of real home data. Sure, the average listing has the count of beds and baths, maybe a photo or two, and occasionally a floor plan. But all the other rooms in your home? The kitchen, living room, garage and basement—and all the amenities, including closets, windows, wiring, and HVACs—don’t exist except as paragraphs of purple prose in the MLS. 

Getting down and dirty with home data would require hours of digging into a property, and that’s not what brokers do—unless there’s a big closing. Consumers need alternate ways to create, distribute, and own their home data outside the sales network. Not just fee transparency but data transparency. In 1985, fully 25 percent of all real estate sales came from “un-represented” FSBO sellers. By 2010, that number sank to 10 percent, today it’s 7 percent. What’s behind the lack of consumer confidence in selling on your own? Listing aggregators (Zillow) that made it easy to see all the listings in one place and contact an agent with a click. And TikToks warning you not to put your hand on the red hot real estate stove. 

The new buyers’ agreements might never stop brokers from colluding to steer us into ever more expensive homes, but they could kick off a wave of innovation based on consumer—not broker—cooperation. And maybe that could be the start of a new American dream. 

Here’s Why the New Broker Agreements Will Fail