What the DOJ is saying about real estate commissions
The U.S. Department of Justice (DOJ) just weighed in on a major real estate commission lawsuit (the Davis case), arguing that agent commissions may still be artificially high because of industry rules and practices. In plain English: even after recent settlements and policy changes, the DOJ believes the way commissions have traditionally been structured can keep costs elevated—and the government wants courts to continue applying antitrust scrutiny.
For everyday buyers and sellers, this matters because commissions are one of the biggest “hidden” costs in housing. They influence how much a seller nets from a sale, how much room there is to negotiate a purchase price, and even how much flexibility a buyer has when planning for closing costs and cash reserves.
Why commissions are under the microscope
Real estate commissions are typically paid from the seller’s proceeds at closing, and for decades the norm has been a percentage of the home’s price that’s then split between the listing agent and the buyer’s agent. The DOJ’s filing argues that certain trade group rules can discourage price competition and keep commissions from adjusting downward like other market-based fees.
While buyers don’t usually write a separate check for their agent’s commission at closing, the DOJ’s position reflects a key point: costs embedded in the transaction can still affect everyone’s bottom line.
How this could affect home sellers
If commission practices change—either through court decisions, new rules, or shifts in how agents structure their services—sellers may see more options for how they pay for representation and how they offer compensation to a buyer’s agent.
Potential seller impacts include:
- More negotiable commission structures, including flat fees, tiered services, or reduced percentages depending on the level of support you want.
- Greater focus on net proceeds: sellers may compare listing options based on “what do I keep after everything?” rather than just sale price.
- Changes to buyer-agent incentives: sellers may decide whether, and how much, to offer toward a buyer agent’s compensation—potentially affecting buyer demand in the short term.
One practical takeaway: if you’re planning to sell soon, it may become even more important to review your listing agreement carefully and understand exactly what services you’re receiving for the fee you’re paying.
How this could affect homebuyers
Buyers could experience the most visible changes in how representation is priced and presented. Depending on how the market adapts, some buyers may see clearer, more direct conversations about what their agent costs and who pays.
What to watch for:
- More explicit buyer-agent agreements that outline compensation and services up front.
- Potential out-of-pocket costs in some scenarios if sellers offer less (or no) contribution toward buyer-agent compensation.
- More negotiation points: buyers may ask sellers for concessions to cover costs, or negotiate price with a clearer picture of total transaction expenses.
This doesn’t mean buyers lose the ability to have representation. It means the market may move toward a model where representation is priced more transparently—similar to other professional services.
How this could affect refinancing and homeowners not moving
At first glance, commission lawsuits might seem irrelevant if you’re not buying or selling. But market shifts can still matter to homeowners considering refinance, cash-out refinance, or home equity planning.
- Home values and liquidity: if transaction costs decline over time, homes can become “easier” to sell, which can support market activity and price discovery.
- Cash-out strategy: some homeowners rely on selling to access equity. If selling costs become more flexible, you may compare “sell vs. cash-out refinance” differently.
- Timing decisions: homeowners may delay or accelerate moving plans based on how quickly the industry transitions to new norms.
For homeowners who want funds for renovations, debt consolidation, or major expenses, refinancing or a home equity option may still be the better fit—especially if you’d rather avoid the costs and stress of listing your home.
What you can do right now
This DOJ action doesn’t instantly rewrite the rules everywhere, but it signals continued pressure for change. The best move is to plan your next step with a full view of costs, not just interest rates or list prices.
- Buying: ask early how your representation is compensated and how that might affect your offer strategy.
- Selling: compare listing options based on net proceeds, marketing plan, and contract terms—not just a “standard” percentage.
- Refinancing: run the numbers on monthly savings and total costs versus waiting to sell later.
Ready to explore your options? Schedule a free consultation with our team today!