Buying or selling a home is the largest financial transaction most Americans will ever undertake. The median priced home cost $184,334* in 2009, and the median commission paid to real estate brokers came to $9,733**. Overall, Americans paid nearly $60 billion for brokerage services.

* Inflation-Adjusted Median Home Sale Price based on data for the first half of 2009
**Inflation-adjusted median commission based on data from the first half of 2009.

New business models are emerging that allow consumers to save thousands of dollars when they buy or sell a home. Where these practices are allowed, some buyers’ brokers are offering refunds on commissions, and some sellers’ brokers are charging only for services actually used.

Ten states forbid buyers’ brokers from rebating a portion of the sales commission to the consumer. Eight states require consumers to buy more services from sellers’ brokers than they may want, with no option to waive the extra items. HUD recently clarified its rule that rebates are permissible under RESPA as long as they are reported on the HUD-1 form.

What are the laws in your state?
Buying? State laws on rebates increase prices
HUD explains that rebates are permitted by RESPA
Selling? State laws on brokerage services increase prices

Some states require real estate closings to be done by lawyers, reducing competition and raising costs. Competition also suffers when brokers exclude low-cost rivals from the multiple listing service (MLS), which limits price competition.