The average buyer’s agent commission was 2.37% for homes sold in the fourth quarter, according to a data analysis from Redfin (NASDAQ: RDFN), a scant uptick from the 2.36% in the third quarter, when the new National Association of Realtors (NAR) commission rules took effect. The commission was down slightly from 2.45% one year earlier, prior to the announcement of the new rules.
Redfin noted that roughly half (48%) of real estate agents said the average agent commission in their area has remained about the same since the NAR settlement took effect, while 43% said commissions have declined and 4% said they increased. Agents also reported homebuyers and sellers are negotiating over commissions more – 54% of agents said their clients are putting more effort into negotiations following the NAR settlement while 34% said negotiation efforts remained about the same and 6% report less negotiation.
Redfin also found the average buyer’s agent commission was 2.17% for homes that sold for $1 million or more in the fourth quarter, down from 2.22% in the third quarter, and down from 2.33% a year earlier. For homes that sold for $500,000 to $999,999, the average buyer’s agent commission was 2.26%, essentially unchanged from 2.27% the prior quarter and down from 2.36% a year earlier.
As for the homes that sold for less than $500,000, the average buyer’s agent commission was 2.46%, up from 2.42% the prior quarter but down from 2.5% a year earlier.
The new analysis was based on Redfin’s data on buyer’s agent commissions for closed home sales. The commission data was sourced from national, aggregated information from sales of Redfin agents’ listings, deals referred by Redfin and closed by Redfin partner agents, or where a buyer used Redfin-owned Bay Equity Home Loans.
This whole NAR settlement decision is just a bunch of smoke and mirrors.
Now you see it, now you don’t!
Realtors provide great services for their prospects and/or clients…what would the market look like in a free for all without Realtors? A disaster.
Commissions for service as always.
The date is from redfin agents. Pretty narrow part of the market.
What they didn’t ask is if sellers are paying higher listing agent commissions. All the lawsuits did was shift the commission, not change it. Listing agents now have more work/value add in that they now have to drive out and show the property more, qualify buyers, write their offers, and do potentially more work for these unrepped buyers. Most listing agents are reporting less pushback on 3% listing commission than before because of this and even putting in listing agreements that if buyer is unrepresented an additional like 1.5% on top for the added work and liability.
Removing the transparency and expectation of what is to be received on the buy side also removed the discount given to sellers for the agent helping on both sides. So again, it hurt the sellers there as well when their agent doesn’t know the commission he’d get on the buyer agency side.
So the whole thing has only shifted perception of value and commissions, not really lowered them in reality in total.