Chicagoans hope to save on real estate commissions

When news broke about the National Association of Realtors (NAR) settlement, many home sellers called their real estate agents wondering: Am I off the hook to pay you?

Why it matters: The status quo is that sellers typically pay a 5-6% commission , which is split between the buying and selling agents.

Catch up quick: Sellers can continue offering to pay both brokers, but according to the settlement , buyers should be compensating their own brokers.

Between the lines: Some home buyers, particularly first-timers , will balk at paying a commission, on top of a down payment and other costs.

What they're saying: "Obviously, [sellers] are trying to save money," but offering to cover even part of that fee could help sell a house, Chicago real estate agent Jesse Treviño tells Axios.

• He predicts that come fall, buyers will likely ask sellers for help paying commissions.
• "It may be an addendum or an attachment to the sales contract that says, we also would like the seller to cover 'X' for the buyer's agent fee, as part of the negotiation."

Sellers should offer no more than 2% of the home sale price to the buyer in concessions, according to Steve Brobeck, a senior fellow at the Consumer Federation of America.

• The buyer can choose to use those funds to compensate their agent, or pay out of their own pocket.

Reality check: According to a 2023 NAR report , 15% of consumers didn't know they could negotiate the commission. That share doubles (31%) among younger buyers, ages 24-32.

What's next: By Aug. 17, the database agents use will no longer include offers of compensation.

• "[Change] will take place slowly, and unevenly, with lots of confusion," Brobeck tells Axios.

The big picture: Selling a house is costly, and commissions are generally the largest expenses .

• Brobeck says he expects the NAR settlement will bring commissions down closer to 4% of the home sale price.

Zoom in: Closing costs also eat into a seller's bottom line. In Illinois , those fees average 3% of a home's purchase price, according to Clever Real Estate, a national online brokerage.

The bottom line: The settlement opens the door for sellers to start keeping a little more profit in their pockets.