Commissions have been on a steady decline for the past decade, but since the NAR settlement policies went into effect this summer, buyer’s agent commissions have seen little impact.
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Buyer’s agent commissions haven’t changed much since the new industry norms went into effect in Aug. 17, which helped agents significantly, Redfin research shows.
In August 2024, the average buyer’s agent commission for a home sale was 2.35 percent. By October 2024, that number had dropped slightly to 2.34 percent, which was also down from 2.45 percent in October 2023.
Credit: Redfin
The analysis is based on internal Redfin data from sales of Redfin agent listings, transactions closed by Redfin partner agents, or those where buyers used Redfin-owned Bay Equity Home Loans. It does not include data from deals where Redfin agents represent buyers as the company offers lower fees for buyer services, which can be as low as 1.75 percent in certain markets.
As of January 2023, broker commissions are down 17 percentage points, down from an average of 2.51 percent. According to the National Association of Realtors (NAR), commissions also fell slightly, dropping from an average of 2.42 percent in March 2024 to 2.35 percent in August 2024. Commissions remained at an average of 2.35 percent in September before falling slightly in October. It’s not clear yet if the decline since August is a continuation of a long-term trend, Redfin said.
“Redfin agents say the biggest difference since August 17 is the need to educate clients about the rule changes and have discussions about costs for agents and buyers early on,” Redfin Chief Economist Daryl Fairweather said in a statement. “Our agents see that as a positive, as it encourages more early communication and increases transparency around costs.”
Fairweather added that many agents continue to see sellers cover the buyer’s agent’s commission, although some do not want to do so in advance, but wait to see if the buyer will ask for this in the application.
In highly competitive markets, however, agents see more discussion about who will pay the buyer’s agent and how much.
“Sellers are increasingly looking to pay 2 percent to the buyer’s agent,” said Redfin Premier agent Jonathan Chvala, based in Chicago. “Now we discuss the commission more often.”
Most home sales that closed in September were under contract before industry changes took effect, Redfin noted, which may also be contributing to the data. If the market becomes more competitive next year, that could have a negative impact on commissions.
“Commissioners may face more pressure next year if we see a resumption of bidding wars,” continued Fairweather. “Sellers are increasingly realizing that commissions are negotiable and that if they have a desirable home, they can get the buyer to pay some, or all, of the buyer’s agent’s commission.” Of course, as with all real estate deals, any negotiation depends on how much demand there is for the property. Sellers who are struggling to find a buyer may offer more to attract interested parties.”
In other markets, such as Austin, Texas, where sales were slow, the commissions of buyer’s agents did not have much impact as sellers relied more on buyer’s agents.
“If you’re a seller, reducing commission is not something you can save right now,” says Andrew Vallejo, Redfin’s premier agent in Austin. “That’s because the buyer may not be able to afford your house if they have to pay their agent out of pocket.”
Commissions have been falling steadily over the past decade as the value of the dollar has increased as real estate prices have grown. In some price brackets, however, commissions have actually risen slightly in recent months.
For properties priced under $500,000, buyer’s agent commissions rose from an average of 2.41 percent in August to 2.43 percent in October.
Meanwhile, buyer’s agent commissions in high-value properties have felt downward pressure. Commissions on properties listed between $500,000 and $1 million fell from 2.25 percent in August to 2.24 percent in October.
Commissions for homes valued at more than $1 million fell from 2.24 percent in August to 2.11 percent in October. However, Redfin’s inventory in this price range is limited, and as such, the data may not represent the high-end market as a whole.
Email Lillian Dickerson
