The average buyer’s agent commission was 2.40% for homes sold in the first quarter, according to a data report from Redfin (NASDAQ: RDFN), up from 2.37% in the fourth quarter of 2024 and from 2.36% in the third quarter of 2024 when the new National Association of Realtors (NAR) commissions rules went into effect. On a year-over-year basis, the commission percentage was down slightly from 2.43% in the first quarter of 2024, when the new rules were announced.
For homes that sold for $1 million or more in the first quarter, Redfin found the average buyer’s agent commission was 2.17%, unchanged from the prior quarter, but down from 2.22% in the third quarter of 2024 and down from 2.30% one year ago.
For homes that sold for $500,000 to $999,999, the average buyer’s agent commission was 2.29%, up from 2.26% in the prior quarter and 2.27% in the third quarter of 2024, but down from 2.34% from the first quarter of 2024.
For homes that sold for less than $500,000, the average buyer’s agent commission was 2.49%, up from 2.46% in the prior quarter, up from 2.42% in the third quarter of 2024, and up very slightly from 2.48% one year earlier.
Redfin’s agents reported that most sellers still pay the buyer’s agent commission, though there are some exceptions. Nearly two in five sellers (37.4%) either negotiated or tried to negotiate the commission paid to their agent last year, while most sellers (45.9%) did not try to negotiate.
Buyers were less likely to negotiate, with over one-quarter (27.2%) negotiating or trying to negotiate the commission paid to their agent last year. Redfin noted that nearly half (47.8%) of buyers did not try to negotiate.
This shows that the lawsuit was a problem with some states not having clear contracts and possibly agents who did not explain the process of buying and selling. You have 2 people working one for the buyer and one for the seller why should they be paid less. It was not going to reduce the commission it might have changed who paid it, either way someone has to pay for the service. Trying to get buyers to pay for their agent may have reduced the out of pocket for the seller, in turn that would have reduced the housing price. The only thing that would change if buyers have to pay the agent is eliminating buyers from the market since they would have had to come up with additional money out of their pocket in addition to the down payment. That would eliminate buyers as they would not be able to afford it.
I was a broker in the Seattle area for 30 years and now a CDEI Real Estate Educator serving 3 states. In not one of them is the listing commission less than 6% of the closing sales price of the property. For $1 Million + priced homes I would not take the listing for less than 7% because frankly those properties cost more to market properly. The cut rate brokerages offering 2% range commission to list imo have damaged the industry by relegating brokers to the status of a used car salesman instead of a professional representation of the client, being held to the same standards as an attorney though not allowed to “practice law”. Frankly, I’m thankful to no longer participating in the market. IMO NAR has NOT served the interests of the profession. Some years back I was instrumental in stopping a line item in a proposed quietly inserted into a Washington State Law, with ZERO notification to or input from the Washington State Real Estate Board of Education, that would have abdicated control of the State’s real estate education requirements for brokers giving NAR, A SCHOOL COMPETITOR, control of courses, content and school. Licensing — a DIRECT CONFLICT OF INTEREST. Shenanigans like that are why there’s a plethora of brokerages who have opted NOT to be members of NAR. In this instance they still have not served the profession that foots their bill with exorbitant annual dues.
I think the whole thing was ridiculous and the Association just folded. Since that happened there will probably be more suits and they will give in again.
Yes, NAR “folded”. Should appeal to Trump(a real estate man) to get DOJ to back off and let market resume as it had successfully for many previous decades.
I HAVE BEEN SELLING REAL ESTATE FOR 54 YEARS AND HAVE NEVER HAD A PROBLEM
WITH COMMISSION PAYMENTS UNTILL THIS YEAR WITH THE SETTLEMENT!
I agree with Jerry…
I have been in business for 55-1/2 years and have NEVER had an issue with commissions until this fiasco came out.
Second that! Need to bring this matter to the attention of real estate man in chief…TRUMP.
I have been in the real estate business for 50 years and never had a problem.
Yes, same here. Tell TRUMP, the real/estate-man-in-chief to get DOJ to drop the matter.
Been licensed since 1979. Commissions were7%. Then dropped to 6. Now there are sellers wanting to pay 1% to the selling agent. The most I have been told is 2%. This is not our fault and we are being penalized.Why is no one fighting this and having the guilty people pay instead of everyone?
It just shows that the business model that has been in effect for 50 some years is fine with our buyers and sellers, if Zillow and all of the attorneys would quit trying to make a problem where there isn’t one we will be fine. I have no problem proving my worth as an agent and having sellers pay the full 6%. We just need to prove our value!
I HAVE BEEN SELLING ALL TYPES OF REAL ESTATE COMEERCIAL , FARM ,ACREAGES ,TOWN HOMES, CONDOS APARTMENT COMPLEXES . COMMERCIAL BUILDINGS,SINGLE FAMILY HOMES ,BUSINESES, EVERYTHING BUT A FACTORY, FOR OVER 57.5 YEARS NO PROBLEMS WITH CO BROKERAGE SPLITTING COMMISSIONS. tHE MLS WAS A GREAT INVENTION.. iF YOU LISTED YOUR HOME FOR SALE WOULD YOU WANT JUST ONE AGENT TRYING TO SELL IT OR ALL 200 IN THE MLS .EACH AGENT SPENDS TIME IN EDUCATION LEARNING ALL NEW LAWS WITH CONTINIUNG EDUCATION AND KNOWING REAL ESTATE VALUES WOULD YOU DO YOUR JOB FOR 40 TO 80 HOURS PER WEEK FINALLY MAKING A SALE AND NOT WANT TO BE PAID . NAR WAS STUPID THEY THREW ALL REALTORS UNDER THE BUS
I received my real estate license in New York in 1986 and my Florida license in 1988. I have not had any problems with commissions. I have lowered my commission sometimes when I represent both the buyer and seller to make the deal work. Our original rules for commission absolutely are the best, especially in today’s market. The buyers cannot afford to pay their agents commission as well as the down payment, closing costs etc. The sellers have the advantage of raising the asking price of their home to help compensate for the commissions.
I find it interesting that one of the only to say this NAR settlement is a good thing is John Weiland builder in GA. Of course he likes it – he won’t have to pay another agent! Or pay much less! I’ve been an agent in GA for over 30 years & commissions are / were always negotiable! If we have a listing that we’re trying to sell – how is it a good idea to have no commission for an agent that would be bringing us a qualified buyer? The buyer is the one funding the purchase anyway – so just build it into the price & negotiate the best you can.
Beating a dead horse. NAR was a complete and total failure on this fight, and they need to show more value or be dismissed as more brokerages have already done.