Agents Say Business As Usual As of Aug. 17 – But Signs of the Troubles to Come

The August 17 deadline has come and gone, and on the outside, real estate experts report that it’s been pretty much business as usual — even if there have been a few headaches for everyone involved.

Listing clients still fully agree to cover the buyer’s agent’s commission. And few home buyers negotiate lower commission rates than usual with their buyer’s agent.

But underneath, some agents and brokers are already reporting deals with clients that – if they continue to play out – could put downward pressure on commissions in the coming months and years.

• 70 percent of real estate respondents to a recent Inman Intel Index survey said commissions did he stayed the same as a percentage of the purchase price from the Aug. deadline. 17, or that it’s too early to tell.
• But another 28 percent of agents say they have already seen a drop in commissions as a percentage of the purchase price since the deadline, compared to less than three percent who say commissions have increased.

What has caused this growing feeling of resentment towards commissions? Intel tried to find out.

Since Aug. 19-30, Intel asked 779 real estate agents, brokers and other professionals a series of detailed questions about their interactions with buyers and sellers, how their local MLS handled the change, and other topics related to the post-deadline situation. .

Their responses suggested little change so far. But a growing number of buyers and sellers are seriously asking about their options. And agents who raise these questions recently have seen their selling clients take an increasingly aggressive stance.

Intel is exploring the impact this could have on the future of the industry.

The expected game

When more than 1 in 4 respondents in a study of this size they say they are seeing commissions go down, it is not immediately clear what that looks like.

Some of these responses were submitted a few days after the change, when many agents had not done the new work themselves.

In some cases, these respondents may have talked to other agents, read accounts of customer conversations, or picked up other information that seemed to confirm their earlier expectations.

• In the weeks leading up to the deadline, 42 percent of agents told Intel that they expect real estate commissions to drop at least slightly as a result of the change.

Since many agents are anticipating a drop in commissions from the start, it would make sense for some to overreact to signs of falling commissions now.

That’s why Intel asked a series of detailed questions to get to the bottom of how the agent-client relationship – in the form of buyer contracts, listing strategies, and more – has changed in recent weeks.

Nuts and bolts

First, Intel wanted to know: Now that the compensation field has been removed from the MLS, have agents been given a seller consent field?

The answer, for most agents, is no.

• Only 28 percent of agent respondents told Intel that their MLS now provides a platform where client listings can demonstrate their willingness to cover the buyer’s side commission.
• In that group, less than half – equal to one 12 percent for all agent respondents – they said they see these fields used regularly.

So how do buyer’s agents make sure a listing includes a buyer’s fee or not? In particular, by making many additional calls, Intel has been found.

• 63 percent agents say they have been trying to contact their listing partners to confirm the seller’s status on the buyer’s side commission, if possible.
• 21 percent agents said they did not reach out to the listing agent ahead of time and instead encouraged their clients to submit an offer involving the seller who would pay their commission, then read the seller’s position as part of the regular negotiations.
• Only 5 percent they say they still rely heavily on the MLS – including any seller’s consent field – for signs of the seller’s willingness to pay the buyer’s money.

The result? Agents are still taking steps to verify this information. Those discussions are no longer ongoing in MLS. It also leads to additional calls, texts and emails between agents that may not have been necessary.

Most interesting, perhaps, is what Intel has learned about how the changes affect conversations with clients.

Relationships have changed

Since August, Intel has introduced a series of recurring questions in its research that will help track the evolution of the agent-client relationship in this new environment.

The new questions are designed to track how quickly – if at all – clients change their behavior to respond to other provisions of the agreement.

With these questions, Intel also hopes to track how low the real estate commissions are from month to month.

• During the three-month period ending in August, 76 percent agents told Intel that none of their potential customers they try to negotiate a lower commission than is typical in their market.
• A large share, 79 percenthe said that none of their agreements have been signed and the buyer’s clients put in a commission that is below what is normal in their market at the same time.

However, a small number of agents reported that a large proportion of clients had negotiated below-market commissions in recent months.

• It’s just over 10 percent the respondent agent said that more than one in 10 buyer contracts signed in the last three months were below market commission.
• About 6 percent of all agents say that more than half of their broker contracts are entered into under the market commission.

On the other side of the job, agents are already fielding tons of inquiries from potential sellers.

In many cases, agents successfully negotiate with their sellers to include a buyer-side commission as a way to make the listing attractive to buyers.

But already, there are signs of a break in this long trend.

• Only 36 percent agents told Intel that none of their prospective sellers have asked if they are obligated to pay a buyer’s commission in the past three months.
• Other 35 percent agents say at least 1 in 10 broker clients have asked about this, incl 21 percent of all agents say at least half of their salespeople ask these questions.

This means that many agents have not yet faced this in their many conversations with selling clients. And in this group, most are able to convince clients to take a traditional approach to consumer financing.

• Three months ago, 73 percent agents told Intel that not in their dealer clients have actually taken a strong stance against covering the buyer’s agent’s commission.
• 11 percent agents say that at least one in 10 of their sellers have taken the hard line approach, incl 5 percent of all agents who say this they do more than half of their sales clients.

But when an agent is bombarded with inquiries from many of his salespeople, the results begin to look very different.

• For agents who reported “more than half” of their recent sellers asked if they needed to cover the buyer’s side commission, only 38 percent he said that none of their vendors he actually went forward in a straight line.
• 34 percent of this group bombarded with customer inquiries said at least one in 10 retailers have taken a proactive approach, incl 22 percent of all agents say more than half of their salespeople have moved forward with this position.

Obviously a small number of agents are dealing with a lot of inquiries from listing clients, and it may be more difficult to convince sellers to stick to the standard approach.

Intel will continue to track these trends in the coming months.

Methodology Notes: This month’s Inman Intel Index survey was conducted on Aug. 19-30, 2024, and received 779 responses. The entire Inman student community was invited to participate, and a rotating, random selection of community members was encouraged to participate via email.. Users answered a series of questions related to their own corner of the real estate industry – including real estate agents, brokerage leaders, lenders and proptech entrepreneurs.. The results reflect the views of the Inman community involved, which may not always be the same as those of the wider real estate industry. This survey it is done every month.

Email Daniel Houston