How Seattle could be affected by the national Realtors lawsuit

The National Association of Realtors recently agreed to settle a big lawsuit that questions how real estate agents are paid — and who foots the bill.

Why it matters: The changes could eventually bring down the cost of real estate transactions — including in Seattle — but in the interim, they're causing confusion for buyers, sellers and their agents.

The big picture: Beginning Aug. 17 , agents won't be able to advertise commission rates in the Multiple Listing Service (MLS), the database where real estate agents post homes for sale.

• Additionally, buyers will have to sign a compensation agreement before a realtor can show them listings, something that is already being done in Washington, John Manning, managing broker for Re/Max Gateway in Seattle, told Axios.
• Advocates for the changes say it could open up a tightly controlled market to more competition and bring down broker fees.
• But the need for the buyer's agency even in places like Seattle, where tight inventory can lead to multiple offers on homes in hours, will not go away, Manning said.

Catch up quick: Currently, sellers pay a commission, usually 5%–6%, on the sale price of their home to their broker, which is then shared with the buyer's agent.

• But the antitrust class action lawsuit brought against the NAR changes the way realtors will earn their money, replacing standard commissions with negotiable fees .
• The current structure has been widely criticized because of concerns that buyers' agents steer their clients toward homes that offer them higher commissions.
• Most observers believe commissions will fall — a lot. Possibly to as low as 1%–1.5% per agent on each side, said Steve Brobeck, a senior fellow at the Consumer Federation of America.

What they're saying: "Real estate is in the greatest state of disruption I've seen in the last decade-plus," said former Zillow exec and Tomo cofounder Greg Schwartz.

What we're watching: How the changes could impact the number of working real estate agents in the Seattle area.

• Manning said experience and expertise will become more critical when real estate agents have to justify their prices to people who will likely be making "the biggest financial investment of their life."