“The NAR…agreed to put in place a set of new rules. One prohibits agents’ compensation from being included on listings placed on local centralized listing portals known as multiple listing services, which critics say led brokers to push more expensive properties on customers. Another ends requirements that brokers subscribe to multiple listing services — many of which are owned by NAR subsidiaries…”
The broker commission field must be removed from MLS listings and MLS will no longer be permitted to offer to pay commissions to agents representing potential homebuyers through the service.
“By some estimates, real estate commissions are expected to fall 25% to 50%, according to TD Cowen Insights. This will open up opportunities for alternative models of selling real estate that already exist but don’t have much market share, including flat-fee and discount brokerages.”
Immediate effect on stocks: Zillow -13%, Compass -13, Redfin -5% (sits at $6.01 right now), Lennar +2.4%, Pulte +1.1%, Toll Brothers +1.8%
I guess everything but home builders are falling in anticipation of lower commissions.
Lower commissions mean lower income for realtors per sale.
Personally I think Zillow has an easier path to adapting to new models so I would not be surprised to see them as the big winner in the long run. Time will tell.
