What's Happening?
A year after new rules were implemented to change how real estate agents are paid, commissions remain largely unchanged according to a Redfin report. The rules, effective August 17, 2024, required buyers to negotiate and agree to their agent's fees before starting their home search, aiming to give buyers more flexibility and bargaining power. Despite this, most commissions are still covered by sale proceeds, with average buyer's agent fees returning to historical norms. The average U.S. buyer's agent commission was 2.43% for homes sold in the second quarter of 2025, slightly up from 2.38% a year earlier. The traditional model, where sellers cover the buyer's agent fee, continues to dominate, especially in markets with softening demand.
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Why It's Important?
The unchanged commission structure impacts both buyers and sellers in the real estate market. Buyers may find themselves with less leverage to negotiate lower fees, potentially increasing their overall costs. Sellers, on the other hand, may continue to cover these fees to make their properties more attractive, especially in competitive markets. This situation underscores the resilience of traditional real estate practices despite regulatory attempts to shift dynamics. The persistence of these practices may influence future policy decisions and market strategies.
What's Next?
As the real estate market evolves, stakeholders may need to reassess strategies to adapt to these unchanged commission structures. Buyers might explore alternative negotiation tactics, while sellers could continue leveraging fee coverage as a competitive advantage. Real estate agents and brokers may also need to adjust their approaches to align with buyer expectations and market conditions. Further analysis and reports could provide insights into long-term trends and potential shifts in commission practices.
