Justice Department investigates commissions, officers accuse elsewhere

[ad_1]

Commercial agents were busy answering questions and signing agreements.

As house prices rise, so does the commissions paid to people who work on both sides of the transaction – real estate agents.

Eyebrows have been raised for years as their fees rise due to higher prices – they usually get a percentage of the final sale price. Some people complain that the fees are not transparent and leave no room for negotiation on a rate that adds tens of thousands of dollars to a transaction.

The Wall Street Journal says a new Justice Department investigation could change all that and put downward pressure on fees paid by home buyers and sellers.

It’s an investigation that will certainly be watched closely in Canada as well, where real estate agents have issued press releases as a precaution claiming they had nothing to do with the rapid increases in the country’s scorching market.

Because the work of real estate brokers has sometimes been wrongly blamed for the rapid rise in property prices, the Quebec Real Estate Association analyzed the underlying context that really drove the market to such a great imbalance, she writes. . He identifies a series of factors resulting from the pandemic that worsened the situation and created what one might call a perfect storm, where supply was clearly insufficient to meet unforeseen demand.

In other words, don’t blame us. The U.S. National Association of Realtors takes a similar approach when it comes to fees, which typically make up five percent of a sale, but have fallen to 4.9 percent after peaking at 5.4 percent in 2012.

The NAR says the current commission structure also encourages more competition by giving all participants in local multiple listing services equal access to available property information, the WSJ reported. It also helps make homes more affordable for first-time buyers and low-income buyers, according to the trade group, since they don’t have to pay their own agents up front.

The Justice Department will investigate whether the commission’s rules stifle competition. If he speaks out against the industry, he could impose new rules on structures or transparency.

[ad_2]