(NewsNation) — It’s been nearly six months since new real estate commission rules went into effect, and so far, buyer’s agent commissions have barely budged.
The average buyer’s agent commission was 2.37% for homes sold in the fourth quarter, essentially unchanged from 2.36% in the third quarter, according to a new Redfin analysis.
The commission rule changes, which took effect in August, came about after a $418 million settlement between home sellers and the National Association of Realtors (NAR).
Under the new terms, listing agents (who represent sellers) can no longer advertise buyer’s agent commissions upfront in NAR-affiliated multiple listing services. It’s a change meant to deter agents from steering clients away from lower-commission deals.
Now, homesellers are no longer automatically responsible for paying both their own agent and the buyer’s agent, but Redfin’s report suggests the NAR’s revamped rules haven’t led to major changes in the way business is done — at least not yet.
“When news of the settlement first came out, some sellers thought they were going to pay nothing to the buyer’s agent. That’s not happening; sellers are realizing most buyers are requesting the seller pay for their agent as part of the offer,” Desiree Bourgeois, a Redfin Premier agent in the Detroit area, said in a statement.
However, when you slice the commission data differently by price tier, there have been some changes in recent months.
Redfin found that buyer’s agents earn slightly smaller commissions for luxury homes but slightly bigger commissions for more affordable homes.
- 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 lower than the 2.33% a year earlier.
- The average buyer’s agent commission was 2.46% for homes that sold for less than $500,000 — up from 2.46% the prior quarter but down from 2.5% a year earlier.
“Buyer’s agents expect a lower commission for luxury homes, and they’re mostly okay with it. They’re still earning more money; 2% of a million-dollar home sale is a lot more than 2.7% of a $300,000 sale,” Stayce Mayfield, a Redfin Premier agent in St. Louis, said in a statement.
The commission rule changes have also led to more haggling, which experts expected.
More than half (54%) of agents in a Redfin survey said their clients are putting more effort into negotiations following the NAR settlement. Only a third of respondents said negotiation efforts have remained the same.
Negotiations also vary by market. Redfin said agents are reporting more negotiation over buyer’s agent commission in competitive housing markets or for particularly desirable homes.
Redfin’s findings may ease some agent’s concerns about plummeting commissions, but it’s still too early to know what will happen in the long run. Buyer’s agent commission rates were falling even before the NAR settlement, and most agents remain worried.
Three-quarters (75%) of real estate agents said declining commissions are a concern for the next five years of their career, according to the Redfin-commissioned agent survey. Just under a quarter said they’re not concerned.