The business of buying and selling homes in Florida could be turned upside down as new rules for paying real estate agents take effect Saturday.

The changes were prompted by a series of antitrust lawsuits against the National Association of Realtors, alleging that it enforced practices that made it more expensive to sell homes. The industry association is also facing a $418 million settlement.

For decades, sellers have used the money from the home sale to pay a commission that is split between their agent and the buyer’s agent. Typically, the commission is 5-6%, although the National Association of Realtors says this amount has always been negotiable.

Two new rules from the National Association of Realtors that set stricter standards for setting commissions could put an end to this long-standing practice.

Some speculate that this could lead to lower revenues for agents and trigger an exodus from the industry.

“This is truly a revolutionary change,” said MaryDell Penney, a market manager at Redfin who oversees agents in Tampa and Orlando. “It’s going to require a shift in thinking from everyone.”

What will change?

Starting August 17, real estate agents will no longer be allowed to charge commissions when listing a home on Multiple Listing Services, a collection of centralized databases used by members of the National Association of Realtors to search for available properties.

Previously, real estate agents were required to report their compensation to Multiple Listing Services. Plaintiffs suing the National Association of Realtors argued that this practice drove up commission rates.

Buyers must also sign a written agreement with their agent outlining how much the agent will receive. The contracts could normalize the practice of buyers paying their agents themselves.

What does this mean for buyers and sellers?

For some, nothing will change. Sellers can continue to offer to pay the full commission as before.

But some will opt for each party to pay their own broker instead, said Lei Wedge, a professor of finance at the University of South Florida’s Muma College of Business. Now everything is up for negotiation.

“It’s not going to be as uniform as it used to be,” she said. “Now you have to deal with everyone’s individual preferences.”

Sellers can end up with more money in their pockets at closing if they choose not to pay the buyer’s brokerage fee.

Buyers could be saddled with new costs. Wedge suspects many will take more time to look for an agent who offers a lower commission or a flat fee. Some may forego using an agent altogether.

Buyers also need to have a written agreement with their agents. Adam Grenville, a Re/Max agent and president of Greater Tampa Realtor, warned that this could be especially difficult because there isn’t yet a universal blueprint for what these contracts should look like.

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“You have to make sure you understand what you are signing,” he said. “Ask lots of questions.”

What does this mean for the future of the industry?

The United States has some of the highest real estate commissions in the world. Wedge said these rules could bring us closer to other countries if more buyers and sellers negotiate with their agents for a lower fee than the traditional 6%.

Since the agreement was announced in March, there has already been a slight decline in average broker commissions for buyers, according to a study by Redfin.

With their income potentially at risk, some brokers may decide to leave the industry. A report by investment firm Keefe, Bruyette & Woods predicted that changes to the commission structure could ultimately lead to up to 1 million brokers leaving the profession.

While there is always turnover after major market changes, Penney says there are steps brokers can take to adapt.

At their brokerage firm, buyers’ agents are already trained to require a brokerage commission as part of the contract when making an offer on a property.

“I think a lot of agents got into the industry during the crazy Covid years when it was relatively easy,” she said. “Now it’s getting harder. You have to have extremely good negotiation skills.”