The typical U.S. home seller pays a 2.55% commission to the real estate agent hired by the buyer, down from the 2.62% average in January, according to one agency. redfin tuna MLS profile analysis. In other words, the March 2024 settlement National Association of Realtors (NAR) and the plaintiffs in the Sitzer-Burnett case may have begun driving down commissions in the national market.
Redfin studied the four weeks ending January 28 and July 14 of this year to compare the average commission rates paid to buyer’s agents. This analysis excludes listings that do not offer commissions and listings that are missing a commission field.
Nationwide, the average commission paid to a buyer’s agent in June and July was $15,377, up slightly from $15,124 in January, which Redfin attributed to rising home prices.
Redfin reports that the average commission percentage paid to buyer’s agents has gradually declined since the NAR settlement was announced, although the decrease has been “minimal and the amount paid to buyer’s agents has remained stable.”
Redfin reports that this does not include a decade-long decline in buyer agent commissions, from 2.89% in 2013 to 2.66% in 2023.
“Redfin agents reported that commissions have been a top concern for customers since the NAR settlement was announced, with some sellers asking What does it mean to offer no commission or offer a relatively low commission.
“Nevertheless, commissions were declining even before the publicity wave of class action lawsuits and NAR settlements. That’s in part because the real estate market before and during the pandemic was highly competitive — which prompted some sellers to offer lower commissions, Because they know they can still attract buyers — along with greater fee transparency.
Redfin analysts found that the percentage of commissions paid to buyer’s agents has declined in all but three of the nation’s 50 largest cities since the NAR settlement was announced. Home prices in Cincinnati have gradually increased (up 2 basis points since January), while prices in New Brunswick, New Jersey, and Montgomery County, Pennsylvania, have remained flat.
Analysts also found that most of the declines were small, less than a tenth of a percentage point. Commission rates fell the most in Detroit, where the average commission paid to buyer’s agents in the four weeks ended July 14 was 2.87%, down from 3.18% in January. Next are Cleveland (2.39%, down from 2.62%) and Miami (2.63%, down from 2.84%).
The highest commission rates are in Austin (2.99%), Cincinnati (2.95%) and San Antonio (2.91%). The lowest rates were in Nassau County, New York (1.95%); Providence, Rhode Island (2.05%); and Anaheim, California (2.11%).
