The average buyer’s agent commission during the third quarter was 2.42%, up from 2.36% one year earlier, while commissions were virtually flat compared to the previous quarter.
According to a new data report from Redfin, commissions are at roughly the same level they were in the first quarter of 2024, when the National Association of Realtors first announced a settlement resulting in new rules for commissions. The third quarter marked the anniversary of new commission rules that went into effect in August 2024.
For homes that sold for less than $500,000, the average buyer’s agent commission remained unchanged at 2.52% from the prior quarter and were up from 2.45% a year earlier for the highest level since the third quarter of 2023.
For homes that sold for $500,000 to $999,999, the average buyer’s agent commission was 2.32%, down from 2.34% in the prior quarter and slightly above 2.31% a year earlier.
For homes that sold for $1 million or more in the first quarter, the average buyer’s agent commission was 2.22%, a mild uptick from the previous quarter (2.21%) but down two basis points from 2.24% a year earlier.
Who pays the buyer’s agent commission?
All commissions are negotiable. I will say in Central Florida of all the transactions I have had since the change last year, the sellers have all offered and paid the buyer broker commission
Yes…with the new rules there needs to be studies done on who pays it and if it’s being split. Seems like we still have thre majority of sellers paying. I have actually seen the buyers agent asking the buyer to make up the difference from 2-2.5% up to 3. What’s it all going to look like in 2-5 years?
For an industry that is not supposed to discuss commissions to avoid collusion and violations of anti trust laws I’m consistency surprised at the focus that this has been placed on these conversations having to take place! Having watched a small presentation regarding anti trust laws as part of my early training some 40 yrs ago. I remember the part where the doors to the jail cell reverberated as the door closes shut. That scared the life out of me. I consider myself to be very cautious in this arena- in part to this visual that I learned early in my career. So it bothers me a lot that we have been placed in a position where we are openly discussing commissions. It feels like a potential trap! I think as Realtors we need to be very cautious in how we approach such conversations. Very cautious.
I pretty much do the buyers broker compensation agreement. I put I writing the buyers request and I have rarely had a conversation about the compensation. In other words – I talk through the paperwork to avoid an issue coming up. This is only after I had a jarring experience right out the door with the new NAR policy. I nearly threw in the towel after that. But I pivoted and have come up with my own way to satisfy them and to keep me out from having those conversations.
What was your jarring experience that almost caused you to throw in the towel and how did you pivot and what did you come up with to satisfy them to keep out of those conversations. More detail would be helpful as an education to your experience.
The violation isn’t for discussing commissions, but for setting commissions as a group. Possibly as a meeting of Realtors, they all get together and agree to charge the same commission. That is what you were taught 40 years ago. This article is just explaining the affect the NAR ruling had on Buyer Broker commissions.
B.S.!!
Victoria asked me to expand on my jarring experience. In august 2024, I had a buyer broker contract with a buyer. She visited an open house and wanted to pursue writing an offer. I contacted the agent and she informed me that the seller was offering a “y” commission. The following week, the rules would be changing and yet this agent told/represented to me that the seller would honor his commitment to compensate the buyers broker at “y”. my contract with my buyer was at a higher amount “x” because she came through the open house over the weekend. I began writing an offer on Sunday night and then it became Monday. So I changed the date of preparation on the offer to Monday. As it turned out, I belonged to one MLS and the listing agent belonged to another MLS. The listing agency’s MLS changed the blanket offer of compensation on Sunday. This was about 4 days before this nationwide change was to take place. This created confusion as to the obligation of the seller to pay a commission. After receiving my clients offer on Monday, the sellers agent called me to tell me that the seller was going to give a counter offer at a price that the buyer would probably have taken. However, he was no longer willing to pay any buyers brokers commission. My reaction was you represented that the seller would honor his commitment to paying brokers compensation of “y”. She said. Well the rules have changed and he wants to take it in this direction. I reminded her that we are no merely scribes. That my client had just cancelled a transaction where we did not think the seller was operating with integrity and that this was very important to my client. The last thing I wanted to do is get into escrow with someone whose word is not their bond with this client. As it turns out the client walked away from this transaction for about 45 days my client and the seller never came to an agreement on this property. I don’t think it was a well thought out strategy to offer to honor compensation and then turn on a dime. Why make that proclamation to begin with? This transaction was literally right out of the gate and actually before the actual date of the change. After I spoke with the agent and advised her that I had not yet received the sellers counter offer but when and if I did, i would advise my buyer of her right to accept the offer and that I could pursue compensation from “y” from the seller, but if I was not successful that they client would be responsible to pay as per our agreement. The listing agents Brokerage thought they were correct but within the hour I received a signed revocation of the counter offer issued from the seller. I’m not sure of the agents reasoning but our jobs are to create clear and binding contracts and she created MURK.
I was disgusted with the lack of professionalism of the listing agent. We are not simply scribes. We don’t just write what sellers want. We educate and we think about the end game. In this instance I nearly thee in the towel be use I thought. I this is what this new business model is going to look like. I don’t want any part of it. In fact, I think it’s going to be harder and harder for buyers to find good representation (particularly in a sellers market). It’s a difficult job to represent a buyer. You have to be capable and available (on call) and the time frame can vary largely. In my area, people look for a forever homes/properties. Which can and often does take years to find the right match.
I think speaking about compensation can lead to a conversation or a statement that could be an anti trust violation. So I am avoiding that. Let the paperwork do the talking/negotiating.