Overall, buyer’s agents are earning an average
of 2.37% in commission—essentially unchanged since the new NAR
rules took effect in August, but down slightly since the rules were
announced last March
(NASDAQ: RDFN) — The average buyer’s agent commission was 2.37%
for homes sold in the fourth quarter, according to a new report
from Redfin (www.redfin.com), the technology-powered real estate
brokerage. That’s essentially unchanged from 2.36% in the third
quarter, during which the new National Association of Realtors
(NAR) commission rules went into effect, but down slightly from
2.45% a year earlier, before the new rules were announced.
The report is based on an analysis of 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.
On a more granular level, overall commissions declined slightly
the month the new rules went into effect. The average buyer’s agent
commission in July was 2.38%, then declined to 2.35% in August (the
rules went into effect on August 17). But the average monthly
commission ended the year at 2.38% in December, exactly where it
was before the rules took effect.
The new commission rules stem from a legal settlement: In March,
NAR agreed to settle a series of class-action lawsuits in part by
creating new rules about the way commissions offered to buyer’s
agents are communicated. Under the new rules, listing agents may no
longer include a unilateral offer for sellers to pay the buyer’s
agent commission in NAR-affiliated MLS’s. Redfin agents report that
most sellers are still choosing to pay the buyer’s agent
commission, though there are some exceptions.
Broadly speaking, agents tend to agree with the data showing
commissions have declined only marginally. Roughly half (48%) of
U.S. real estate agents say the average agent commission in their
area has remained about the same since the NAR settlement took
effect, according to a Redfin-commissioned survey of 500 U.S. real
estate agents from a variety of brokerages fielded by Ipsos from
December 13, 2024 to January 8, 2025. More than two in five (43%)
say commissions have declined, while 4% say they have
increased.
Agents also report homebuyers and sellers are negotiating over
commissions more; more than half (54%) of agents said their clients
are putting more effort into negotiations following the NAR
settlement. One-third (34%) said negotiation efforts have remained
about the same, and 6% report less negotiation.
“Buyers and sellers are still asking about commissions, and
sellers are still navigating what the new rules mean for how much
they should offer or agree to pay the buyer’s agent,” said Desiree
Bourgeois, a Redfin Premier agent in the Detroit area. “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. It’s an ongoing conversation, but
people are starting to understand and asking more pointed
questions.”
Commission rates had started to fall gradually in the decade
prior to the NAR settlement. But in dollar terms, buyer’s agents
earn more money because home prices have risen significantly.
Commissions Are Falling For $1 Million-Plus Homes, Increasing
for Homes Under $500,000
When the commission data is broken down by price tier, a
different trend emerges. Buyer’s agents are earning a slightly
smaller commission percentage for luxury homes than before the NAR
settlement, and a slightly bigger percentage for more affordable
homes.
- For homes that sold for $1 million or more in the fourth
quarter, the average buyer’s agent commission was 2.17%. That’s
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 flat from
2.27% the prior quarter and down from 2.36% a year earlier.
- For 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.
Commissions are falling a bit for high-priced homes because
agents have more room to reduce their fees and still earn a healthy
paycheck.
“Luxury sellers typically expect buyers will want them to cover
2% in buyer’s agent commission. That’s different from what we’re
seeing for more affordable homes; buyers of those homes are often
asking sellers to cover a 2.5% or 2.7% commission,” said Stayce
Mayfield, a Redfin Premier agent in St. Louis. “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.”
Redfin agents are reporting more negotiation over buyer’s agent
commission in competitive housing markets, and/or for a
particularly desirable home. If a seller gets multiple offers, they
may be more likely to negotiate about who pays the buyer’s agent,
and how much.
Most real estate agents expect commissions will fall
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 one
quarter said they’re not concerned about declining commissions.
More than half (51%) of agents believe commissions will decline
in the next 12 months, 38% believe they’ll stay the same, and 5%
believe they’ll increase.
To read the full report, including charts and methodology,
please visit:
https://www.redfin.com/news/agent-commissions-expensive-affordable-q4-2024/
About Redfin
Redfin (www.redfin.com) is a technology-powered real estate
company. We help people find a place to live with brokerage,
rentals, lending, and title insurance services. We run the
country's #1 real estate brokerage site. Our customers can save
thousands in fees while working with a top agent. Our home-buying
customers see homes first with on-demand tours, and our lending and
title services help them close quickly. Our rentals business
empowers millions nationwide to find apartments and houses for
rent. Since launching in 2006, we've saved customers more than $1.6
billion in commissions. We serve approximately 100 markets across
the U.S. and Canada and employ over 4,000 people.
Redfin’s subsidiaries and affiliated brands include: Bay Equity
Home Loans®, Rent.™, Apartment Guide®, Title Forward® and
WalkScore®.
For more information or to contact a local Redfin real estate
agent, visit www.redfin.com. To learn about housing market trends
and download data, visit the Redfin Data Center. To be added to
Redfin's press release distribution list, email press@redfin.com.
To view Redfin's press center, click here.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250204920585/en/
Contact Redfin Redfin Journalist Services: Erin
Osgood press@redfin.com
Redfin (NASDAQ:RDFN)
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