In the nearly 12 months since the National Association of Realtor (NAR) announced its new guidelines, overall buyer agent commissions have declined.
Sell My House Idaho founder Char Hiaring attributed the drop to listing agents no longer being allowed to set a fixed buyer’s agent commission in NAR-affiliated Multiple Listing Services (MLS).
“The recent commission changes have made real estate fees more negotiable,” Hiaring told The Epoch Times. “Buyers and agents now have to negotiate fees, which puts pressure on agents to prove their value to keep their commissions up.”
New commission rules came about as a result of litigation. Last March, the NAR settled multiple class-action lawsuits involving the way commissions are offered to buyer’s agents.
The new laws, effective Aug. 17, 2024, mandate stricter fee transparency and disclosure requirements.
“As a consequence, heightened competition in the marketplace between brokerages has ensued,” Florida realtor Alexei Morgado told The Epoch Times. “The fall in percentage indicates that the new laws effectively engender pricing efficiency and fair competition in the marketplace.”
Written buyer agreements are now required before showing a home and compensation offers from a seller or a seller’s agent to a buyer’s agent may no longer be shared on MLS.
About half (48 percent) of some 500 U.S. real estate agents from a variety of brokerages reported to Redfin that the average agent commission in their area from Dec. 13, 2024, to Jan. 8, 2025, has remained about the same since the NAR settlement took effect. Meanwhile, 43 percent said commissions have declined, and 4 percent said they increased.
In Boise, Idaho, Hiaring has noticed a decrease of around 5 percent in agent commissions.
“Over time the commissions will continue to vary but sellers may still offer to pay buyer commissions to attract more offers,” he said. “In Idaho, commissions haven’t changed much but negotiation is happening more often, which is a good thing because buyers and sellers should understand what they’re paying for and feel confident in the value their agent provides.”
The buyer’s commission is the fee paid to the buyer’s agent for representing the buyer in the transaction while agent commissions is a broader term that includes both the listing agent’s commission paid by the seller and the buyer’s agent’s commission paid by the seller.
In Jupiter, Florida, commissions have risen on both the buy and listing side, according to Jeff Lichtenstein, Echo Fine Properties CEO and broker.
“Ours are up,” Lichtenstein told The Epoch Times. “We just took a 3 percent compensation on an expired listing where the previous agent was at 2.5 percent. The previous agent had a blue lockbox by the front door and missing or bad information in MLS. So, the compensation for good agents who demonstrate and can execute will be higher on both the buy side and sell side.”
Overall, the NAR settlement created more responsibility for buyers, causing them to opt out of working with an agent altogether, according to Adam Hamilton, CEO and co-founder of REI Hub in Richmond, Virginia.
“Some are going alternative routes,” Hamilton told The Epoch Times. “For those who are still sticking to working with an agent, many are making more of an effort to negotiate commission fees with their agent, and agents are feeling a bit more pressure to comply.”
Redfin analysis further found that the average buyer’s agent commission was 2.17 percent for luxury homes that sold at $1 million or more during the fourth quarter compared to 2.33 percent last year and for homes that sold for less than $500,000, the average buyer’s agent commission was 2.46 percent compared to 2.42 percent during the prior quarter.
“Luxury home commissions have dropped because high end buyers negotiate more while affordable home commissions have risen since those buyers rely more on their agents,” Hiaring said.
Lichtenstein believes the principals of supply and demand may be at play.
“There is more demand for higher priced homes so sellers may have more leverage,” he added.
