Real estate commissions for agents representing buyers have remained essentially unchanged since new industry rules went into effect in August, according to a new study by Redfin.
The average buyer’s agent commission for homes sold in October was 2.34%, only slightly below the 2.35%-level for homes sold in August, when new industry rules were adopted to give homebuyers more say in agent commissions. The average commission was 2.45% in October of 2023. The report’s findings are based on internal data on buyer’s agent commissions for October home sales, and information from Redfin agents.
Following class-action lawsuits, the National Association of Realtors (NAR) agreed earlier this year to change how commissions offered to buyers’ agents are negotiated. According to Redfin, under the new rules, which went into effect on August 17, listing agents cannot include a unilateral offer for the buyer’s agent commission. The agents must get agreement from potential buyers about what the agents charge before touring homes.
The new rules were intended to lower rates. But commissions at most price points have stayed relatively stable, except for homes listed above $1 million. In this high-end bracket, buyer’s agent commissions fell from an average of 2.24% in August to 2.11% in October.
“Redfin agents say the biggest difference since August 17 is the need to educate customers about rule changes and have conversations about agent fees with buyers at the start,” said Redfin Chief Economist Daryl Fairweather. “Our agents see that as a positive, as it encourages more communication upfront and increases transparency around fees.”
Traditionally, sellers paid the buyer’s agent commission as well as their own agent’s commission, and that status quo is continuing, according to Redfin agents. Still, in competitive housing markets, agents report more negotiations concerning the amount the buyer’s agent makes and who pays.
“Sellers are more and more wanting to pay 2% to a buyer’s agent,” said Jonathan Chvala, a Redfin Premier agent in Chicago. “Now we’re negotiating commission more frequently.”
