Weeks into the new world of residential real estate commissions, change is uneven throughout the country.
It’s a “tale of two markets,” said Redfin chief economist Daryl Fairweather. “In slow markets where there’s less demand from homebuyers … agents report that most sellers are still willing to pay the buyer’s agent commission to attract buyers, and agent fees are mostly the same as before.”
Redfin surveyed agents about how the National Association of Realtors’ settlement has affected their business since the changes went into effect on Aug. 17. Multiple listing services across the country have eliminated fields for offering compensation to a buyer’s broker, and agents had to get buyers to sign agreements before taking them to properties.
But in markets with lower inventory and higher demand, agents are reporting more negotiations around fees and say sellers are asking buyers for their best offers on homes, rather than proactively offering a commission for the buyers’ agent. That could exert downward pressure on fees over time.
The true effect on fees is going to be difficult to discern because they’re no longer visible in an MLS.
One issue agents pointed to in the survey was confusion over the agreements needed before house tours. Some brokerages are requiring shoppers to sign exclusivity agreements, leading prospective buyers to balk.
But buyers and sellers are increasingly negotiating over payment for a buyer’s agent, including who pays the commission. Agents said those negotiations are even more likely with luxury listings, considering how much money is at stake for each fraction of a percentage point on commission.
Sellers are proving that they’re still willing to cover a buyer’s agent’s fees, but are paying close attention to how much they stand to net. There’s also been discussions between agents about showing schedules and seller intent regarding commission possibilities.
“Things haven’t changed that much,” Boston Premier agent James Gulden stated in Redfin’s report. “The commission is no longer automatically coming from the seller, but most sellers are still open to paying it.”
However, the dynamics are changing and will continue to evolve. Homebuyers are more emboldened by the rise of digital listing platforms and sellers feel they’re more in control of a confounding process.
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