New Real Estate Commission Rules Bring Uncertainty, but Also Transparency, to Chicago Homebuyers
Nic Van Horn’s family is searching for a new home in Chicago, a process complicated by recent changes to real estate agent commission rules. These changes, implemented in August by the National Association of Realtors (NAR) as part of a $418 million antitrust settlement, represent a significant shift in the industry. Historically, sellers paid both the buyer’s and seller’s agent commissions, embedded within the sale price. This meant buyers typically didn’t incur a direct cost for agent services. Now, however, buyers and sellers negotiate commissions separately with their respective agents.
Van Horn, aware of the settlement, finds the new system introduces uncertainty. He’s unsure whether the seller will cover his buyer’s agent commission or if his family will need to pay it directly, or incorporate it into their offer. This uncertainty, he says, adds stress to an already complex process.
Despite the settlement’s implementation months ago, many buyers remain unaware of the changes. Real estate agents express concern about the future of commissions, and while October data showed a slight dip in Illinois, it’s too early to determine its significance.
Van Horn’s agent, Grigory Pekarsky of Vesta Preferred, outlines three payment options: direct payment by the buyer or seller, or inclusion of the commission in the offer. Pekarsky observes that consumer awareness remains low, predicting it will take 12 to 24 months to fully understand the settlement’s impact.
Laura Ellis, chief strategy officer at Baird & Warner, confirms that buyer awareness varies widely. While some buyers inquire about the changes, the biggest fear is the potential for unexpectedly high costs. Ellis assures that most buyers aren’t paying agent fees directly, with the transaction still covering the cost. At Baird & Warner, commission rates have remained steady or even slightly increased, though Ellis acknowledges it’s early to draw definitive conclusions.
Tommy Choi, president of the Illinois Realtors association, similarly hasn’t observed a significant shift in commissions. The NAR maintains that commissions have always been negotiable and denies any wrongdoing. Concerns that the settlement might lead to agents leaving the industry haven’t materialized, with many buyers still relying on agents’ expertise, particularly for the significant investment of buying a home.
Jerrold Bregman, a partner at BG Law, notes that the increased bargaining power for buyers and sellers will likely lead to lower negotiated commission rates, especially once interest rates fall. Illinois real estate laws will change in 2025, requiring signed buyer-broker agreements, a practice already common among NAR members due to the settlement.
Sammy Lubeck, a Baird & Warner Realtor, observes some hesitancy among buyers to sign contracts before viewing homes, but others appreciate the increased transparency. He views the required buyer-broker agreement as a positive, fostering loyalty and trust between buyer and agent. Pekarsky advises against contracts with cancellation fees, emphasizing the importance of finding a compatible agent and negotiating favorable terms. Both Pekarsky and Lubeck recommend interviewing multiple agents before committing to an agreement.
Van Horn’s family, planning a move mid-summer, values their agent’s proactive approach and market knowledge. The new commission rules have added complexity, but the benefit of professional representation in navigating such a significant financial decision remains clear.