Beginning Tuesday, the Northwest Multiple Listing Service (NWMLS) will allow brokerages to publicly display buyer broker commissions — and at least three of the Pacific Northwest’s top brokerages have agreed to follow suit.
Redfin, Windermere Real Estate and Coldwell Banker Bain will all publicly display the selling office commission – what the seller and listing agent agree to pay the buyer broker – for all listings on their own IDX websites.
In a proactive move, Redfin began displaying the selling office commission on its own listings in late August, not waiting for the NWMLS ruling to take effect. Windermere Real Estate began displaying it on October 1 and Coldwell Banker Bain will add the information sometime in the future.
“This could lead home-buyers to be as careful about commissions as sellers already are,” Redfin CEO Glenn Kelman said in a statement. “We’ve spent more than a decade trying to compete not just on the quality of our service to homebuyers, but on price, by refunding part of our commission back to the homebuyer.”
Russ Cofano, a broker with Windermere Real Estate and former executive in the real estate industry, called the NWMLS ruling both progress and good for buyers. The NWMLS boasts approximately 2,300 member offices and 30,000 real estate brokers across 23 counties in Washington state.
“Over time, at least in Seattle, no buyer will believe that a buyer’s agent’s services are free,” Cofano said. “Which I hope will force all buyer agents to be able to define and communicate their consumer value proposition or, alternatively, put them out of business.”
The decision to be more transparent about buyer broker commissions comes in the wake of two class-action lawsuits filed against the industry’s top brokerages and franchisors, which alleges they and the National Association of Realtors are violating the Sherman Antitrust Act by requiring listing brokers to make a “blanket, non-negotiable offer of buyer broker compensation” when listing a property on the MLS, which the suit refers to as the “Buyer Broker Commission Rule.”
The suit alleges this rule has inflated costs for sellers by requiring sellers to pay a higher commission than they otherwise would if, instead, buyers paid buyer’s agents directly.