Homebuyer Lock-In Risk Grows After NAR Settlement Rule Change

Their contract also included a commission of 4% of the sale price, well above the national average of 2.7%, plus a $995 flat fee. The CFA has called such admin fees “junk fees.” The contract did not mention termination options. If they leased a property during the year, they would owe one month’s rent plus the $995 fee.

“I saw that, and my heart dropped,” Ganas said. “I didn’t even realize that was in there.”

All these details are legal. Critics say the typical consumer buys or sells a home only a few times in a lifetime. “How many people could read that contract and understand all the implications of it?” said Prentiss Cox, who teaches consumer-protection law at the University of Minnesota.

Rita Sumney, the broker under whom Waterhouse works, defended the practice. “When you let somebody out of an exclusive buyer-agency contract, you’ve just devalued that contract for every Realtor in our industry,” she said. Agents are independent contractors who rely on commissions. A home search can take a year or more, and they have no guarantee of a payday. Sumney noted that Ganas was able to negotiate the commission down to 3% when she made an offer.

Waterhouse, the agent, said he explained the contract’s terms and that Ganas and McCarley had a chance to read it. “Dan is one of our top agents,” Sumney said.

Research published last year by the Federal Reserve found that state laws requiring signed buyer representation agreements before the settlement had no significant impact on commissions. Most sellers still offer to cover buyer agent commissions, keeping the old payment structure intact. The rule changes have not triggered a massive shift in fees.

Ganas and McCarley have paused their home search. Their plan is to wait until the agreement expires in January 2027, then resume with a year of hard lessons behind them. “When we’re ready to buy a house,” Ganas said, “I will be much more versed in these things.”