The Aug. 17 rule change by National Association of Realtors (NAR) on commissions appears to have minimal impact on how buyer’s agents are paid.
According to new data from Redfin (NASDAQ: RDFN), the average buyer’s agent commission for homes sold in October was 2.34%. In comparison, the average commission for home sold in August (when the rule change went into effect) was 2.35%. One year ago, the average was 2.45%.
Redfin also noted that buyer’s agent commissions have declined by 17 basis points since January 2023, when they averaged 2.51%.
“Redfin agents say the biggest difference since Aug. 17 is the need to educate customers about rule changes and have conversations about agent fees with buyers at the start,” said Redfin Chief Economist Daryl Fairweather. “Our agents see that as a positive, as it encourages more communication upfront and increases transparency around fees.”
Among the different home pricing sectors, buyer’s agent commissions for homes listed under $500,000 inched up from an average of 2.41% in August to 2.43% in October. Buyer’s agent commissions for homes listed between $500,000 and $1 million ticked down from an average of 2.25% to 2.24%. And buyer’s agent commissions for homes listed above $1 million fell from an average of 2.24% in August to 2.11% in October.
Fairweather predicted commissions could decline in 2025 if a new wave of bidding wars begins.
“Sellers are becoming increasingly aware that commissions are negotiable and that if they have a desirable home, they may be able to get the buyer to cover some, or even all, of the buyer’s agent commission,” she said. “Of course, as in all real estate deals, any negotiation is dependent on how much demand there is for a property. Sellers who are struggling to find a buyer may even offer more to help attract more interest.”
Redfin noted its data is culled from buyer’s agent commissions for October home sales that either closed or are scheduled to close by the end of the month. The commissions data was sourced from sales of Redfin agents’ listings, deals closed by Redfin partner agents, or where a buyer utilized Redfin-owned Bay Equity Home Loans. The data did not include transactions where Redfin agents represented the buyers, because the company sets competitive fees for its buyer services, which can be as low as 1.75% in some markets.
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Agents need to disclose on property flyers if seller is paying buyers agent and the amount..
Not in California
wrong. the rule change has a big effect. no one wants to represent buyers any more. the selling agent are getting all the business.
I agree with Andy 100%!
Everything was fine, everything was working great, until coward and TRAITOR NAR dropped their pants and sold us out right down the river. Sellers just want to SELL their home, and never had a problem signing listing agreements at the 5 or 6% commission rate, and there was always room to discount that percentage ONLY if Necessary as a last resort to save the Deal. Buyers, NEVER EVER were hassled to sign agreements to be able just to visit and view a property, buyers were NEVER asked to pay their Agent’s Commission.
SHAME ON USELESS TREACHEROUS NAR!!
You expressed it perfectly Franco!
Agreed!
Was mind boggling that NAR lost the lawsuit in the first place since commissions were never “fixed.” NAR apparently not competent when hiring legal team and have now put buyer’s agents in a very tough position.
The NAR settlement was a terrible move overall for the industry. The lawsuit was nothing but a money grab by the plaintiff lawyers. Buyers are overwhelmed and intimidated the new process, and agents are frustrated with all of the possible commission scenarios and associated paperwork. Moreover, some buyers seem to have become even more independent as a result of the new rules and are trying to move forward on their own.
Jeff, well stated! While sellers may be saving a bit, this has hurts buyers. They are sacrificing representation to save money and they are the big losers as this is very confusion. Its almost like we have gone back to 30+ years ago when buyers had no representation–every agent worked for the seller.
Mostly true. You should figure out how to be a listing agent and you’ll double your income.
What we see now probably won’t be the same in a year or two. It’s a ridiculous game plan by the department of Justice. It’s anti-consumerism actually in my humble opinion..
There never was and never will be price fixing in the real estate business -nar should hire those same lawyers to re peal this horrible ruling – nar does price fixing on the fees realtors pay the way it’s tied to the local realtors association-pay the nar or not be a part of local association- anti trust ?
Agents that are experienced and can communicate their value are successful in getting paid.
Inexperienced and those that do not offer value are working for less.
I believe agents that cannot compete in the marketplace will eventually leave the real estate business.
Buyers do not mind paying an agent that brings value to the transaction.
It’s still not a fair playing field. Listing agents have the control and usually win. Not a good plan.
Negotiate your buyer agent fee with your buyer. Explain / prove to them your value as their agent. Do not depend on the listing agent setting your value via cooperative compensation.
With an appropriately presented offer, request your buyer agent compensation to be paid at close by the seller (at a rate you already established in writing with your buyer client).
I have witnessed buyers agent compensation amounts being paid at higher levels than the compensation offered by the seller and the selling agent.
If you have the experience and knowledge in the real estate field – do NOT rely on others to set your value.
Do NOT pass up that property that may fit your clients needs simply because the cooperative compensation is not disclosed or is less than what you have already negotiated with your buyer.
If your buyer wants the appliances to stay – even if the seller states they are not included – negotiate it out.
If you want the buyers agent fee included – even if none is offered – negotiate it out!
Sellers WILL pay a buyers agent fee.
It’s always about the net bottom number in their pocket.
My main issue is that Seller’s Agents are at a competitive advantage in real estate transactions. Many Buyers reluctant to sign exclusive Buyer’s Representation agreements will simply go to Open Houses on their own where the Seller’s Agent, knowing that the Buyer is not represented, will either work a dual agency, or in the case of bigger brokerages will simply refer the Buyer to one of the Company’s agents. The small brokerages that had formerly worked with Buyers will be left out in the cold, unless they can persuade the Buyer to sign an exclusive representation agreement. The Seller’s Agent holds all the cards and fundamentally controls the commission, since they can influence the Seller to offer compensation, or not. The odds are stacked against the Buyer’ Agent!
While I realize this is 100% not connected to real estate, however class action law suits are popping in all industries. My dog was chipped as a puppy, the company that has his records charges right around $20.00 a year for (not much). I knew years ago that the annual fee was not connected to the chip working and really was not for much at all. But the class action law suits say consumers were unaware. I am now getting emails so I can fill out a form and maybe get $20.00 for the class action. No one but the attorneys win on these deals.
Really, the market is very complicated, I seem a market monopoly this situation is not equal to each side of the transaction.
Where are the ANTI-MONOPOLY LAWS…????
Listing agents are justifiably writing into listing agreements a higher commission than 3% if they are helping an unrepresented buyer. They now have to travel to show more, making sure the buyer is vetted/prequalified, have more liability, and are having to walk these buyers through every step.
All the lawsuits did was HURT consumers and shifted who the same commissions are paid too by encouraging buyers to go unrepped because of a false perception of getting a lower price (not shown) and a big chunk of that “saved” commission goes to the listing agent.
Seller’s are not saying “Oh you don’t have an agent? Let me lower my price.” That would defeat the purpose of commission savings!!
Location, Location, Location, if the properties are located in an area where buyer’s are not able even to compete with the those buyer’s that heavy packets nevertheless afford to pay a buyer’s agent commission. Only those seller’s that properties are seating in the market for long time can use the incentive of paying full commission. This whole change in this industry for most part has only benefited the attorneys that brought the law-suit.