Redfin’s latest report shows that since the National Association of Realtors’ settlement in March, the average buyer’s agent commission percentage has declined in 47 of the 50 largest markets. However, strong home prices led to a small increase in commission amounts.
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Although the deadline for the National Association of Realtors commission settlement rules to be enacted is still 15 days away, a report released by Redfin on Friday shows that the typical buyer’s agent is already starting to feel the pinch.
The typical buyer’s agent commission started the year at 2.62%; however, as of July, that average had dropped 2.67% to 2.55%. Although the commission rate dropped, strong home sales prices meant the typical buyer’s agent’s commission amount increased by 1.64% ($15,124 in January to $15,377 in July).
Redfin said buyer’s agent commissions have been declining for years, but believes discussions about the terms of the NAR settlement, which include eliminating compensation for buyer’s agents in multiple listing services affiliated with real estate agents, and Requiring a buyer’s agent to sign a representation letter to come to an agreement with the buyer before showing them the home — leading to more negotiations.
Daryl Fairweather
“Redfin agents reported that commissions have been a top concern for customers since the NAR settlement was announced, with some sellers asking What it means to offer no commissions or offer relatively low commissions “Nonetheless, commissions were declining even before the publicity frenzy of class action lawsuits and NAR settlements. “
“This is partly due to the intense competition in the real estate market before and during the pandemic – which prompted some sellers to offer lower commissions because they knew they could still attract buyers – and greater transparency around fees,” she added road.
At the local level, Redfin found that buyer agent commissions fell in 47 of the 50 largest U.S. cities.
Detroit saw the largest commission percentage decline, with the typical buyer’s agent’s commission falling from 3.18% in January to 2.87% in July. Cleveland (from 2.62% to 2.39%) and Miami (from 2.84% to 2.63%) rounded out the top three, with commission rates falling by 8.77% and 7.39% respectively.
Cincinnati was the only market to see an increase in commission rates, with the typical buyer’s agent’s commission rising slightly from 2.93% in January to 2.95% in July, an increase of 0.68%.
When it comes to commission amounts, California is hands down the leader. The typical buyer’s agent in San Francisco ($50,734), San Jose ($43,159) and Anaheim ($39,877) made twice as much as the national average in July. Meanwhile, the typical buyer’s agent working in the Rust Belt — Cleveland ($5,280), Detroit ($7,054) and Pittsburgh ($7,918) — makes four figures per transaction.
Redfin CEO Glenn Kelman addressed the commission crunch Wednesday at the Inman Connect conference in Las Vegas, saying brokerages and portals need to do more to help real estate agents on both sides of the transaction improve Be productive and earn a fair wage.
“More than a third [agents] A second job is necessary to stay in real estate. But I don’t want to disparage the industry. I’ve been doing this for 18 years. This is an industry I love,” he said. “What I learned from attending this conference is where this love comes from: people like to be their own bosses.”
“People are worried about the unpredictability of revenue and that it’s hard for them to find customers,” he added. “This is a challenge we’ve been working hard to solve. Becoming a real estate agent and making a living shouldn’t be that hard.
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