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The age-old question of what justifies broker fees often comes up as people embark on buying or selling their homes — and discount brokerages are egging on the conversation.

American home sellers and buyers pay among the highest fees to agents, the New York Times reported. In the U.S., the standard fee is 6 percent, with 3 percent going to the seller’s and buyer’s agents, respectively. Compare that to Asia or Europe, where standard broker fees are as low as 1 or 2 percent.

Real Estate Broker Fee Lawsuits

As the pandemic has pushed even more of the buying and selling process online, discount brokerages with models based on online listings and transactions are keeping the subject top of mind.

Last week, Redfin announced it would publish agent commissions on thousands of public listings. It’s a move that’s in line with the spirit of the Department of Justice’s settlement agreement with the National Association of Realtors for the industry to make agent commissions more transparent to consumers and fix the industry’s misleading, incorrect advertising.

The firm says the logic behind the suit is based on the view that homebuyers are doing an increasing amount of the work to find a home without an agent’s help.

“You’re starting to see a kind of drum beat,” Mike Toth, REX’s general counsel, told the Times. “Buyers are doing so much of the work themselves. So why are commissions so high?”

Boston Real Estate and the Bottom Line

The continued suits and positioning of firms like Redfin and REX indicate that pressure on the industry to reduce fees and increase industry competition is not going anywhere.

Boston Real Estate for Sale

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