Buying or selling a home just got more complicated. Here’s what to know about new commission rules for agents.

👋 Welcome to Trendlines. The secret word is "dog."

I'm Boston Globe financial columnist Larry Edelman, and today, I look at what new rules for real estate commissions portend for home buyers and sellers.

Plus: the scourge of pickleball.

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Commission Commotion

📰 The news

New rules took effect on Aug. 17 governing how real estate agents can be paid.

• Gone is the decades-old convention in which sellers paid a commission — usually 5–6 percent of the sales price — and their agent would split the money, typically 50/50, with the buyer’s broker.

• Instead, buyers will now be required to sign a contract setting out how their agent will be compensated, while sellers will have more flexibility to negotiate a rate with their broker.

⏪ Rewind

The changes stem from the National Association of Realtors’ settlement earlier this year of lawsuits brought by home buyers alleging that agent commission rules were tantamount to price fixing.

• Lawyers for the home buyers argued that “decoupling” commissions for agents on either side of the deal could reduce costs for sellers and buyers by making it easier for them to negotiate.
• The lawsuits also said the NAR rules gave brokers the incentive to steer their house-hunting clients to more expensive properties to earn bigger commissions.

🫸 But

The deal has left agents and consumers to hash out a new commission model — or, more likely, an array of options. The process could take months, if not years, and complicate things for buyers and sellers in the meantime.

🔎 Details

Under the court agreement, the NAR said it would remove commission-sharing terms from the property listing databases run by its affiliates — known as multiple listing services, or MLS — around the country.

• But agents can still agree to split commissions outside of those databases. They could simply do it by text or email.

🤔 Final thought

Upending the NAR’s commission model, which dates back to 1913, will be disruptive in the short term.

And in the long run, the settlement could fail to make much difference at all.

📈 Trending

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Wind power: Another GE Vernova wind turbine blade failed, this time off the coast of England.

Workplace: Long Covid has knocked a million Americans out of the workforce.

🥒 The Closer

Judy Comeau is in a bit of a pickle.

Comeau says the plan to sell the Bourne home she shares with her husband was derailed by the incessant pop-pop-pop coming from the pickleball courts that abut their backyard. 

“We deserve to have quiet time in our yard, and I deserve to be able to sell my home,” Comeau told Globe correspondent Jacqueline Munis. “Now I’m paying a year’s worth more of mortgages and taxes. It’s taken a toll on our retirement and our life and our livelihood.”

Comeau has hired a lawyer to put pressure on the Sagamore Beach Colony Club, which put up the courts four years ago.

Advantage Comeau?

Thanks for reading. I will be back on Thursday.

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