Misleading the Market? A Realtor’s Response to The Daily’s Take on Commissions
An earnest letter written in response to the multitude of clients, friends, family members, and colleagues who sent me The Daily’s podcast episode, The Housing Market Has New Rules. Realtors are Evading Them.
Thank you for thinking of me and sharing this podcast—it truly means a lot. I wanted to take a moment to provide some insight based on my experience in our local market and clarify a few important points.
One major concept that was not given much attention in the podcast is that Real Estate operates as an open and free market. Commissions are negotiable, and prices—along with commission structures and transaction costs—are driven by supply and demand. Like any professional service, there’s always someone willing to do it for less.
As a seasoned agent deeply connected to all facets of the industry, I can confidently say that while the article and podcast are loosely based on facts, they fall short in fully representing the complexity of the issue. It’s also important to remember that real estate laws and practices vary significantly from state to state. Colorado, in particular, is known for contracts that strongly protect the consumer.
Regarding the Settlement:
In March 2024, NAR agreed to a $418 million settlement and introduced several key rule changes:
MLS platforms will no longer display offers of buyer agent compensation. Previously sellers did have to offer some buyer agent compensation (even if it was $1) to be listed on the MLS.
Buyer agents must sign written agreements with their buyer clients before home tours, agreeing to compensation terms upfront.
Further reinforces that broker fees and commissions are fully negotiable.
The lawsuit stemmed from a lack of transparency in some states, where sellers unknowingly paid both their listing agent and a buyer’s agent without fully understanding how the commission was being split/commission structure. One state even used a standard contract that pre-set commission options at 6%, 7%, or 8%—clearly problematic.
In Colorado, we have always used a clear and transparent listing agreement that outlines commission structure (without suggesting percentages). Previously this was negotiated up front with the seller and memorialized in the contract. Now, any amount (including $0) that the seller directs the listing agent to communicate to buyer agents as a “agent success fee offered” is still able to be discussed, negotiated, and memorialized in the listing contract. They may also ask their agent to communicate nothing at all in this regard.
Buyers now have two options: 1- pay their agent directly, 2 - instruct their agent to include a seller paid commission in their purchase offer.
Today, buyer agent commissions are negotiated with the buyer up-front (between the buyer and their agent) rather than advertised in the MLS. Subsequently, the buyer may instruct their agent to include a seller paid buyers commission in their offer, which is negotiated in the same manner as price and terms would be. The principle remains the same—commissions are negotiable.
Because we are currently in a buyer-friendly market, sellers are more open to covering buyer agent fees. If these changes had occurred during a strong seller’s market, the impact may have looked very different. Real estate is dynamic and evolves with market conditions and the balance of power between buyers and sellers. Personal note: If I were selling my home, I would want a professional buyer agent to be representing any potential buyers to bring clarity, experience, and certainty to the transaction (and would gladly pay them). I could go on for days why this is of value to all parties.
Misinterpretation of the Settlement
In my view, the podcast misrepresents the settlement as a sweeping overhaul of Realtor commissions that will automatically lower transaction or home costs. In reality, competition has always existed, and there have always been “disruptors” offering various pricing models. The value of homes is dictated by supply and demand.
Real estate is a free market. I know agents who will list a home for as little as 1%, and others who charge 4%. This range has existed throughout my career. The idea that commissions were not negotiable in Colorado simply isn’t true. They always have been—between agents and their clients. Who pays what (buyer vs. seller) is just another term of the negotiation.
Looking ahead, I do anticipate further “decoupling” of commission structures—buyers paying their agents, and sellers paying their listing agent. This will pose a challenge for affordability, as buyer agent fees currently cannot be financed through traditional lending, and will disproportionately affect entry-level and first-time buyers. This headwind, much like the Blockbuster vs. Netflix analogy used in the Podcast will take years, perhaps decades to reconcile.
Transparency & Contracts in Colorado
A recurring claim in the podcast is that Realtors “operate in the shadows.” That characterization couldn’t be further from the truth—at least here in Colorado. We use Real Estate Commission-approved forms, drafted by teams of attorneys (contracted by the Colorado Real Estate Commission and the Department of Regulatory Agencies – NOT Realtor groups), that clearly outline commissions, costs, and all key terms. Contrary to the dismissive tone of the podcast (“all this paperwork, all this mumbo jumbo”), nothing is more transparent than a contract.
The idea that this settlement somehow overrides the open market principles of real estate is flawed. To quote the podcast: “The real losers are home sellers because the settlement was supposed to drive down prices.” In truth, this may place a greater financial burden on buyers, especially first-timers. The settlement brings the rest of the country closer to the level of transparency we have had in Colorado for years. Broader economic forces are far more responsible for the current shifts in the market than this settlement.
Thank you again for sharing this podcast with me. A key goal of my career is to be a trusted resource for all things real estate—not just during transactions, but as an ongoing source of value and support.
All my best always,