A new data study has determined the commission rates that real estate agents charge to buyers and sellers has held steady since the National Association of Realtors (NAR) settlement went into effect in August.
According to data from AccountTECH, the average commission rate charged to sellers at 30 days post-settlement was 2.77%, compared to 2.75% at the same time one year earlier. At 60 days, the average commission rate was 2.738%, compared to 2.724% one year earlier.
At 30 days post-settlement, the average commission rate charged to buyers was 2.545%, compared to 2.595% one year earlier. At 60 days, the average commission rate 2024 was 2.486%, compared to 2.541% one year earlier.
“Additionally, the study found that the number of new buyer side transactions decreased in the first 60 days after the NAR settlement when compared to 2023,” said the data study from AccountTECH. “In 2023 during the same period, the number of new buyer side transactions was 19,274. This represents a decrease of 1,916 transactions, a decrease of about 10% year-over-year. This may be a point of concern as it suggests a potential reduction in buyer side market activity following the settlement.”
The data analysis encompassed sales at 625 real estate offices; only transactions where the date the transaction went under agreement was within 60 days of the NAR settlement were included. The study focused solely on sales transactions, excluding rental commissions or any other type of commission income. Outliers, defined as cases where the commission charged was over 5% or below 0.5%, were also excluded.
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As we all expected. Much adieu about nothing?
It takes time for consumers to grasp what benfits them – and do not discount the distractions of an election…
I think article is misleading❗️The fact that “buyer side transactions” have decreased by 10% should tell us that buyers now choosing MOT TO PAY a commission are asking Listing agent/ Broker to act as a dual agent representing both seller & buyer. This places additional pressure on commission because sellers no longer wish to pay an incentive compensation to buyer’s agent/ broker! Also, if buyers’agent had a commission agreement, the agreement and percentage (%) of compensation must be disclosed to the seller and seller CANNOT contribute more $ than agreed by buyer and buyer’s agent❗️NAR really screwed their members❗️
It seems to me the settlement has hurt both buyers and sellers. Commission rates for buyer brokers had been dropping over the past several years, and now, suddenly, agents are writing higher percentages into their contracts while assuring their clients the seller or listing broker will pay it. With the rise of flat and low fee brokerages, many sellers are the ones paying that commission directly, and they don’t exactly see the point of paying thousands and thousands of dollars to an agent who is technically working for someone else. Buyers may also be at a disadvantage because many agents are unwilling to negotiate their commission rates in the buyer rep agreement. For example, if they run into a seller who would rather pay 2% instead of 3%, the buyer may lose their dream home because the agent is unwilling to come down on their rate. They could come in with a higher sale price to cover that commission, but then that is working against their own client. While the intent of the lawsuit settlement may be a baby step in the right direction (i.e., getting each party to pay their respective brokers for services rendered), it has done absolutely nothing to alleviate costs for buyers or sellers.
At first, I will admit extreme frustration to the situation…but now a few months down the road we are seeing higher GCIs than prior to the lawsuit. While the DOJ tried to lower our service fees, the opposite has happened because most agents are now ensuring full payment of what is on the contract regardless of what is being offered by a seller. Smart agents are taking this as an opportunity to raise their commissions, you are worth it!
We have to get our heads out of the sand. This was a complete sellout by NAR. Who really represented Realtors? Did you really have a voice in this costly decision? My guess is it wil be revisited by the new administration next year.