Why broker fees have barely changed since the big settlement
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Illustration: Sarah Grillo/Axios
After last year's headline-grabbing legal settlement, real estate commissions haven't budged much.
Why it matters: People are still buying and selling homes mostly the same way, with many sellers covering at least part of the buyer's agent fee, on top of their own.
By the numbers: Average commissions dipped from 5.64% to 4.96% in the months following the shift in rules in August, according to research by real estate news company RISMedia.
- A new Redfin study finds buyer agent commissions show little change.
How it works: The settlement involving the National Association of Realtors bars brokers from advertising commissions on shared industry databases.
- Sellers have long offered to pay 5-6% in commissions, split between their broker and the buyer's broker.
It's now the buyers' job to ensure their agent gets paid, though the settlement doesn't stop sellers from covering the cost, or buyers from asking them to.
- For example, sellers can defray buyer agent fees through concessions, money that goes toward a variety of home-purchase expenses.
- A near-record 44% of sellers gave concessions to buyers recently, Redfin data shows.
Reality check: Not everyone is embracing the settlement aims. Some agents push back on efforts to negotiate lower commissions, the New York Times reports.
- The National Association of Realtors "is resolutely opposed to any attempt to circumvent the settlement," a spokesperson told the outlet.
The big picture: The trade group agreed to settle after a jury found it liable for inflating broker fees.
- That's sharpened tensions between consumers and agents who say their expertise is worth the cost.
- And it's sparked other industry shake-ups that could impact clients.
What we're hearing: Watchdogs expected changes "would take place very slowly," as some brokers work to "preserve the old system," Stephen Brobeck, senior fellow at the Consumer Policy Center, tells Axios.
What's next: Homebuyers and sellers can save by discussing their agent's pay in dollars, not percentages, Brobeck says.
- Many see 6% of a $400,000 sale price as cheaper than $24,000 — even though it's the same.
