Value and Pricing Difficulties for Real Estate

Alright, let’s talk about something that’s been bugging me—the way home prices are about to get seriously weird. Thanks to a new settlement involving the National Association of Realtors (NAR), the whole system of real estate commissions is getting a shake-up, and it’s exposing a little secret: home prices weren’t exactly what they seemed to be in the first place.

See, for years, when you saw a home listed at, say, $400,000, that price included the buyer’s agent commission. It was just baked in—everyone knew it, nobody questioned it. The buyer wasn’t cutting a separate check for their agent because the seller already factored it into the home price. Now? That’s changing. Sellers are no longer required to offer a commission for the buyer’s agent, which means two things: (1) buyers might have to pay their agents out of pocket, and (2) home prices should, in theory, be lower because that built-in commission is no longer a thing.

But here’s the catch—will home prices actually drop? And if they don’t, are buyers just getting double-charged? That’s the million-dollar question. If a buyer has to shell out for their agent separately, but the home price doesn’t go down to reflect that, then they’re basically paying for something that isn’t there anymore. Feels a little sketchy, right?

Appraisers are also in a bit of a pickle. If commissions were always part of the home price before, do they adjust their valuations now that they’re not? If they don’t, then homes might be overvalued. If they do, sellers might not like what they hear. Meanwhile, buyers are just trying to figure out if they can still afford a house without having to dip into their “emergency tacos and coffee” fund.

Bottom line? The real estate market is about to get messy. If you’re buying, selling, or just enjoying the chaos from the sidelines, keep an eye on how this plays out and maybe we’ll finally see what homes are really worth without all the extra fluff in the price tag.