Mary Anne Bryan is preparing to sell her three-bedroom brick Colonial in the Beverly area of Chicago, where she raised her daughter. With a decade of experience as a real estate agent, she understands the recent shifts in an industry that has faced pressures due to lawsuits regarding commissions for buyer’s agents.

Bryan plans to take on some of the responsibilities of selling her home herself. By avoiding the 2.5% commission typically paid to a listing agent, she could save thousands. However, she still faces significant uncertainties.

One major concern is how to confirm whether a potential buyer is genuinely ready to make an offer. On the other hand, if the buyer has an agent, what commission will that agent expect?

“How can you tell if buyers without representation are pre-approved?” she questioned. “What’s the process, and how can you ensure that it’s done fairly? Despite my knowledge, I’m worried I might make a mistake.”

The Rise of FSBOs

A Missouri jury’s decision in 2023 determined that the National Association of Realtors and several major real estate firms conspired to keep commission rates high. Following this ruling, new regulations that altered how commissions are established and communicated took effect in August.

While much of the focus has been on how buyers are affected, homeowners considering selling their properties are entering a new landscape, too. Coupled with the growing comfort of Americans with online transactions and the realization that sellers have leverage in one of the tightest real estate markets to date, the prospect of selling without an agent (For Sale By Owner, or FSBO) has never seemed more attractive.

“The FSBO market has undergone dramatic changes since the compensation requirement was omitted from the MLS (Multiple Listing Service),” remarks Victor Lund, managing partner at WAV Group, a consulting firm in the real estate sector. “It’s now a competitive arena.”

The modification in compensation requirements starting in August relates to the buyer’s agent’s commission, which has typically been covered by the seller in the American housing market. Plaintiffs in the lawsuits initiated in 2023 claimed it was unfair for sellers to pay for representation for the buyers.

The previous system often led to situations where the buyer’s agent received a higher commission than the seller’s agent, since sellers wanting to cut costs could negotiate lower fees for their agent. Conversely, buyers seldom considered the commission structure.

Many buyer’s agents have asserted that their commissions were always negotiable; however, experts point out that buyers often had little understanding of how their agents were compensated or what the typical commission rates were. Furthermore, if a seller proposed a lower commission for the buyer’s agent, many buyer’s brokers would discourage their clients from pursuing those properties.

As the new regulations rolled out, there were expectations that buying a home would become more complex. Yet, as Bryan’s situation highlights, sellers may encounter just as many uncertainties.

What’s the Best Way to Sell Your Home?

Ena Koellish views these changes as a chance for growth.

She and her husband founded The K Group Real Estate in Radcliff, Kentucky, two years ago, driven by a desire to inform clients about their choices in what is often a major life decision. However, as she explored the commission lawsuits more deeply, she was taken aback.

“I was shocked to discover the extent of unethical practices in this field,” Koellish shared. While not all agents engage in such behavior, she highlighted a persistent resistance to changing the traditional approaches in real estate that render transactions complex and confusing for many consumers.

Currently, Koellish creates informative videos and shares them online, explaining the selling process to those interested. She believes homeowners should have the ability to choose a “package” of services from a listing agent but also the option to select only specific services for a fee if they wish to manage part of the selling process themselves.

“My husband believes we’re entering the industry at the right moment,” Koellish told YSL News. “We’re adopting sound practices and following the right protocols. We are committed to operating ethically.”

Consider a Real Estate “Coach” Instead of a Traditional Agent?

According to Lund, there have always been a few agents who provide limited services for a low fee. For many informed homeowners, particularly those with real estate experience or those who have been through the selling process multiple times, such a service could be a suitable option.

However, he warns potential sellers to avoid the mistake of thinking they can manage everything by themselves. “If you’ve ever sold something simple, like a couch on Facebook, you know it can be challenging. It’s a frustrating experience,” he commented. “Real estate agents provide a valuable service.”

According to Lund, the challenges often arise from what he terms “the background stuff”—such as knowing the right platforms to advertise a home—which are simple for professionals but can be daunting or confusing for untrained sellers. Most sellers usually require at least a “coach,” he mentioned.

Some industry veterans share the same optimistic perspective as Koellish, albeit on a larger scale. Brad Rice, having launched multiple mortgage and real estate firms, recently introduced Homepie, an online platform designed to link buyers and sellers while providing services to streamline the entire transaction process. Currently, Homepie operates in California and Florida, with plans to expand its reach.

Mary Anne Bryan expresses concern over the number of individuals who will attempt to sell their homes by themselves without fully grasping the consequences.

“My greatest worry is that most people only sell a few homes in their lives,” she said. “Realtors play a critical role, and they deserve to be compensated fairly for what they do.”

Nonetheless, she concluded, there seems to be room for the system to improve its efficiency. “Perhaps offering services a la carte is the way forward,” she suggested.