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..
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!!
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.