New reports from Redfin show agent commissions have experienced little change since new rules related to the National Association of Realtors’ (NAR) settlement in Sitzer-Burnett went into effect on Aug. 17.

The average buyer’s agent commission for homes sold in October was 2.34 percent, down one basis point from 2.35 percent for homes sold in August. That is down from an average of 2.45 percent recorded a year ago, Redfin stated.

The Aug. 17 rule change was part of NAR’s settlement in a case where a jury found the trade organization and other defendants had violated antitrust laws by following NAR’s cooperative compensation rule. As of the settlement terms’ implementation, listing agents may no longer include a unilateral offer for the buyer’s agent commission in NAR-affiliated multiple listing services (MLSs), and agents must inform – and get agreement from – potential buyers about what they charge before they start touring homes.

“Redfin agents say the biggest difference since Aug. 17 is the need to educate customers about rule changes and have conversations about agent fees with buyers at the start,” Redfin Chief Economist Daryl Fairweather said. “Our agents see that as a positive, as it encourages more communication upfront and increases transparency around fees.”

According to Redfin’s analysis, buyer’s agent commissions have fallen 17 basis points since January 2023, when they averaged 2.51 percent. Commissions dipped following the NAR settlement, dropping from an average of 2.42 percent in March to 2.35 percent in August. Commissions remained at an average of 2.35 percent in September, before dropping by a single basis point to 2.34 percent in October.

“It’s too soon to say whether the trend since August is a continuation of, or departure from, the long-term trend of declining commissions,” Redfin stated in a release.

Fairweather said Redfin agents reported sellers are covering the buyer’s agent commission in most transactions, though more sellers are deciding not to proactively offer a commission and instead are waiting to see what buyers request in their offer.

“Sellers are more and more wanting to pay 2 percent to a buyer’s agent,” said Jonathan Chvala, a Redfin premier agent in Chicago. “Now we’re negotiating commission more frequently.”

Increased negotiations have not resulted in a significant decline in commissions according to Redfin’s data, but the real estate brokerage stated it was worth noting that many sales closed in September went under contract before the changes took effect. Agents and consumers, many of whom started working together before August, are still adjusting to the new rules.

“Commissions may face more downward pressure next year if we see a resurgence of bidding wars,” Fairweather said. “Sellers are becoming increasingly aware that commissions are negotiable and that if they have a desirable home, they may be able to get the buyer to cover some, or even all, of the buyer’s agent commission,”

“Of course, as in all real estate deals, any negotiation is dependent on how much demand there is for a property. Sellers who are struggling to find a buyer may even offer more to help attract more interest.”

Andrew Vallejo, a Redfin Premier agent in Austin, Texas, told Redfin he has not seen a difference in commission rates since the Aug. 17 rule changes, as sales in the Austin market have been sluggish.

“If you’re a seller, reducing the commission isn’t something you can save on right now,” Vallejo said. “That’s because the buyer may not be able to afford your house if they have to pay their agent out of pocket as well.”

Redfin noted that while commissions have been gradually decreasing over the years percentage-wise, the actual dollar amount paid for commissions has increased significantly because home prices have risen to all-time highs.

Redfin also pointed out there was a difference in commission rates based on different price brackets. Buyer’s agent commissions for homes listed under $500,000, the most common type of transaction in Redfin’s data, rose slightly from an average of 2.41 percent in August to 2.43 percent in October. In contrast, buyer’s agent commissions for homes listed between $500,000 and $1 million decreased from an average of 2.25 percent to 2.24 percent.

This trend continued as the sales price went higher – buyer’s agent commissions for homes listed above $1 million fell from an average of 2.24 percent in August to 2.11 percent in October. Redfin stated this aligned with anecdotes from its agents, who reported downward pressure on commissions for high-end listings.