The Future of Real Estate Commissions: Trends and Predictions

real estate agent talks with clients - future of real estate commissions

A lot has been discussed regarding potential changes to real estate commissions following the proposed settlement in the National Association of REALTORS® (NAR) lawsuit. If you’re considering entering the real estate field, you might be curious about how this recent lawsuit could impact your earnings. Here is an overview of real estate commissions and insights on how they might evolve.

Related article: Understanding the NAR Lawsuit Settlement and Its Impact

Key Takeaways

  • Real estate commissions remain negotiable. Despite regulatory changes affecting how buyer agent compensation is listed on MLS following the settlement, the flexibility to negotiate commissions is unchanged. The settlement does not directly impact the fees that sellers and buyers pay for services.
  • As home prices rise, even potential changes in commission percentages could be offset by the increasing total value of commissions.
  • Despite speculation about the end of traditional real estate models due to digital platforms and discounted services, the majority of U.S. home sellers continue to use agents or brokers.

What You Need to Know About Real Estate Commissions

Here’s what you need to know about U.S. real estate commissions post-settlement.

1. Real estate commissions have always been negotiable.

Real estate commissions have always been and will continue to be negotiable. Typically, residential real estate commissions range between 5-6% of the price of the property. Traditionally, sellers would pay the entire commission, which would be shared among the seller’s agent, buyer’s agent, and the respective brokerages.  Before the settlement, it was common practice for the seller’s agent to share the buyer’s agent commission amount in the agent-only section of an MLS (multiple listing service.)

Following the settlement, the seller’s agents are restricted from posting the buyer agent compensation on the MLS. However, commissions will remain negotiable. The proposed settlement does not influence the actual fees that sellers and buyers will incur for services.

2. Commissions increase alongside home prices.

While commissions have varied regionally and been negotiable over time, home prices have been rising across nearly every U.S. market.
Should there be shifts in commission structures, agents might receive a smaller percentage of each sale. Nevertheless, as home prices climb, the total value of commissions is likely to increase.

3. Efforts by companies offering low-cost real estate services have generally not been successful.

Despite predictions about the decline of buyer’s agents with the rise of online property listings, attempts by firms like Purplebricks and Redfin to capture market share through flat fees or reduced commissions have largely not succeeded. According to a 2024 study by NAR, 89% of home sellers in the U.S. engaged an agent or broker.

Predicted Changes in Real Estate Commissions After the NAR Lawsuit Settlement

The future of real estate commissions post-settlement is still uncertain. Here are some thoughts about common predictions:

Related content: What Real Estate Professionals Need to Know About the NAR Settlement

More buyer’s agents may offer alternative payment structures.

Post-settlement, it’s anticipated that buyer agents might increasingly adopt reduced commission percentages, flat fees, or hourly rates. NAR member buyer agents will need to secure written buyer agency agreements prior to providing brokerage services, leading to more upfront discussions about compensation.

The traditional commission structure may continue to be the norm.

There is a possibility that the longstanding commission framework will continue, with buyers and sellers accustomed to the usual 5-6% commission for a seamless transaction process.

Buyer agent commissions might eventually be rolled into a mortgage.

Some first-time homebuyers would have difficulty coming up with a substantial amount of cash to pay their agent when putting money down on the loan and paying for moving expenses. For now, buyers aren’t allowed to roll buyer’s agent fees into their mortgage. However, according to NPR, a change in mortgage underwriting rules may allow this practice.

The need for smart, customer-focused real estate agents will continue post-settlement. Don’t wait to go through the licensing process. Get started today by enrolling in your pre-licensing courses with Gold Coast Schools.  Gold Coast Schools offers online, livestream, and in-person Florida real estate classes. Begin your real estate career in Florida with Gold Coast today.

“2024 Home Buyers and Sellers Generational Trends Report.” National Association of REALTORS®. Accessed June 10, 2024.
Horsley, Scott. “If You Recently Sold Your Home, You Might Get Part of Your Realtor Fee Back.” NPR, March 22, 2024.