Are real estate agent fees a racket?
ADRIAN MA, HOST:
Tomorrow on ALL THINGS CONSIDERED, it goes without saying that whether you're buying or selling a home, the process can be expensive and confusing. Just ask Nick Kraus (ph), who recently became a first-time homeowner. How much did you know about the home-buying process before going into it?
NICK KRAUS: Basically nothing. Yeah. I knew vaguely what a mortgage was. We watched some, like, you know, Instagram Reels and some YouTube videos about, like, what to look for in visiting homes and stuff like that.
MA: Like almost 90% of people who buy homes nowadays, Nick and his wife decided to enlist a real estate agent, you know, somebody to help scope out listings and handle contracts. And yet, despite doing all this work on their behalf, Nick and his wife were a little surprised that their agent did not charge them a dime.
KRAUS: I think she just kind of mentioned that they would get paid by the seller. We didn't have to worry about it.
MA: Do you think it's weird that the seller pays your agent? Because the buyer's agent is supposed to represent the buyer's interest, but the seller is the one who pays your agent.
KRAUS: (Laughter) I did, yeah - Not going to complain.
MA: Yeah. Well, you know who is complaining? The plaintiffs in a massive antitrust lawsuit against the real estate industry's biggest players. They say the way agents get paid artificially inflates home prices. Consumer advocates like Steve Brobeck agree.
STEVE BROBECK: There's a conflict of interest. The compensation is all out of whack with the value that the consumers receive.
MA: And changing that compensation model might come sooner than you think. We'll tell you all about how that lawsuit could upend the real estate industry as we know it. That is tomorrow on ALL THINGS CONSIDERED. Transcript provided by NPR, Copyright NPR.
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