In August, new real estate commission rules were implemented following a $418 million settlement between home sellers and the National Association of Realtors (NAR). These changes prevent listing agents from advertising buyer’s agent commissions upfront in NAR-affiliated multiple listing services (MLS), aiming to curb steering practices. Sellers are no longer automatically required to pay both their own agent and the buyer’s agent, leading to increased negotiation over commissions.
Six months after the new rules took effect, the impact on luxury home sales has become clearer. While overall buyer’s agent commissions remain steady at 2.37%, luxury market commissions have seen a decline, while commissions for lower-priced homes have increased slightly.
According to Redfin, the average buyer’s agent commission for homes sold at $1 million or more dropped to 2.17% in the fourth quarter, down from 2.22% in the third quarter and 2.33% a year earlier. Conversely, for homes priced under $500,000, commissions have risen slightly to 2.46% from 2.42% in the previous quarter.
Luxury home transactions are seeing lower commission rates as agents accept smaller percentages due to higher transaction values. Since a lower percentage on a high-value transaction still results in significant earnings, agents in the luxury market are more willing to negotiate down their fees. Additionally, high-end sellers often expect to cover around 2% in buyer’s agent commission as part of their pricing strategy.
Despite concerns about plummeting commissions, the luxury market remains stable, with sellers continuing to cover buyer’s agent fees in most cases. However, increased negotiation over commissions suggests further shifts may be ahead.
Cress is a leading real estate agent serving buyers of high-end properties in Fairfield County, CT. What sets us apart from other agents is our unwavering commitment to offering the lowest fees in the industry for the level of service we provide. We believe you shouldn’t have to sacrifice quality for affordability.
Our flat fee buyer’s agent services and commission rebate models make luxury real estate more accessible, delivering top-tier service and unmatched value. By streamlining operations and leveraging technology, we pass those savings directly to you, ensuring an exceptional real estate experience. For more information, visit www.callcress.com.
Doug Cress
(212) 203-5251
doug@cress.co
License #RES.0832278
Fairfield County, CT
Enterprise Realty Inc.
License #REB.0751297
80 Huntington St.
Shelton, CT 06484
