Be careful what you ask for: The myth of ‘decoupling’ real estate commissions

In the wake of the Sitzer-Burnett lawsuit and the National Association of Realtors (NAR) settlement, consumer advocates claimed a major victory. Their long-standing theory — decoupling commissions so buyers pay their own agents — was supposed to lower housing costs and create a more competitive marketplace.

It hasn’t.

In fact, recent analysis from the Consumer Federation of America (CFA) — the very group that championed decoupling — acknowledges a fundamental reality: While a few more sellers are a bit more inquisitive about how commissions are paid and a very select few decline to pay buyer agent commissions, and in most cases sellers are still paying the buyer agents commission.

In addition to that the home prices haven’t come down at all due to this and the transactions are not cheaper. The promised savings for consumers have simply not materialized.

That should prompt some reflection

Instead, we are seeing a familiar pivot. The blame is once again being placed on real estate agents — accused now of failing to negotiate aggressively enough. But this argument conveniently ignores the most obvious force in any housing transaction: the seller’s price. In a market constrained by supply, with persistent demand and high construction costs, the idea that shifting who pays commissions would meaningfully lower home prices was always more theory than reality.

Let’s be clear: the Burnett-Sitzer lawsuit and the resulting NAR settlement are not transformational reforms. They are, at best, a rearranging of the deck chairs on the Titanic, changing the structure of how fees are presented without addressing the underlying economics of the housing market.

Decoupling does not create more housing. It does not reduce land costs, labor shortages or regulatory barriers. It does not make financing cheaper. What it does do is shift costs around in a way that may ultimately disadvantage buyers — particularly first-time and moderate-income households.

For decades, one of the quiet strengths of the existing system was that buyer representation could be financed through the transaction itself. Decoupling risks turning that into an upfront, out-of-pocket expense. For many buyers already struggling with down payments, closing costs and rising interest rates, that additional burden may discourage them from seeking professional representation altogether.

That is not a win for consumers

It is also worth noting emerging unintended consequences. Reports of increased “pocket listings” — properties marketed privately or within limited networks — should concern anyone who cares about transparency and fair access. A fragmented marketplace benefits insiders, not everyday buyers.

Where does this leave us?

The CFA’s own findings undermine their central claim. If decoupling does not lower prices, and early evidence suggests it does not, then what exactly was achieved? Consumers were promised savings. Instead, they are facing a more complex, less transparent system with no clear financial benefit.

This is a classic case of policy driven by theory rather than practice.

Consumer advocates meant well. The goal of reducing costs and improving fairness is one we all share. But good intentions do not guarantee good outcomes. In this case, the push for decoupling may have disrupted a system without delivering the benefits that were promised.

There’s an old saying in public policy: be careful what you ask for.

We would be wise to heed it now.

Joseph Ventrone is the former Vice President of Federal Policy and Industry Relations at the National Association of Realtors (NAR). He serves as a voluntary consultant to NAR, a member of the Arlington County Housing Commission, and President of the North Rosslyn Civic Association. The views expressed are his own.

This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.

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