Commissions Dip Overall, Rise on Less Expensive Homes After NAR Settlement

February 19, 2025 - 3 min read

It sent shockwaves through the real estate industry.

Fast-forward nearly one year after the National Association of Realtors (NAR) historic $418 million lawsuit settlement and home buyer agent commissions decreased slightly, according to Redfin.

See what the first full quarter of data shows.

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Initial commissions decrease post-NAR settlement

When news broke on March 15, 2024 about NAR’s $418 million settlement, home buyers and sellers alike wondered what the ramifications would be.

Amongst the changes that took effect Aug. 17, 2024, the nationwide class-action lawsuit resulted in sellers no longer being required to pay buyer agent commissions. Prospective home buyers will need a written buyer agreement and negotiate their agent’s commission fees. Those were both optional prior to the settlement.

“When news of the settlement first came out, some sellers thought they were going to pay nothing to the buyer’s agent, said Redfin agent Desiree Bourgeois. “That’s not happening; sellers are realizing most buyers are requesting the seller pay for their agent as part of the offer. It’s an ongoing conversation, but people are starting to understand and asking more pointed questions.”

Early results showed small commission changes in the first full quarter of data, according to Redfin. The average buyer agent took home a 2.36% commission in the fourth quarter of 2024. They stayed flat quarterly, while falling from 2.45% year-over-year.

QuarterAverage buyer agent commission
Q1 20232.51%
Q2 20232.49%
Q3 20232.48%
Q4 20232.45%
Q1 20242.43%
Q2 20242.38%
Q3 2024*2.36%
Q4 2024**2.36%
*Settlement went into effect on Aug. 17. **First full quarter of commission data

However, the average commissions and how they changed varied by home price tier. Properties below $500,000 had the highest percentage at 2.46% in Q4 and were the only tier to grow from Q3. Middle-tiered homes merely inched down, while those over $1 million decreased the most (both quarterly and annually).

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Price tierQ4 2023Q3 2024Q4 2024
Below $500,0002.50%2.42%2.46%
$500,000-$999,9992.36%2.27%2.26%
$1 million+2.33%2.22%2.17%

This development makes sense from an agent’s perspective, as the new commission shares align accordingly to make the juice worth the squeeze.

“Luxury sellers typically expect buyers to want them to cover 2% in buyer’s agent commission. That’s different from what we’re seeing for more affordable homes; buyers of those homes are often asking sellers to cover a 2.5% or 2.7% commission,” said Redfin agent Stayce Mayfield. “Buyer’s agents expect a lower commission for luxury homes, and they’re mostly okay with it. They’re still earning more money; 2% of a million-dollar home sale is a lot more than 2.7% of a $300,000 sale.”

Looking ahead

Like any massive industrial shift, NAR’s settlement agreement comes with mixed opinions. Some say it will improve home buying conditions, others think the changes added complexity onto the consumer.

Though, real estate professionals appear pessimistic about their prospects. Three quarters of agents are concerned about falling commission rates in the next five years. In the shorter term, 51% believe they will decline in the next 12 months, while only 5% think they will grow.

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The bottom line

While the first series of results are in, this situation will likely be fluid as home buyers, sellers, and agents become more familiar and comfortable with the latest regulations.

“Buyers and sellers are still asking about commissions, and sellers are still navigating what the new rules mean for how much they should offer or agree to pay the buyer’s agent,” Bourgeois said.

If you’re ready to buy or sell a home, speak with a local lender or real estate professional today — especially if you have questions about negotiating commissions.

Paul Centopani
Authored By: Paul Centopani
The Mortgage Reports Editor
Paul Centopani is a writer and editor who started covering the lending and housing markets in 2018. Previous to joining The Mortgage Reports, he was a reporter for National Mortgage News. Paul grew up in Connecticut, graduated from Binghamton University and now lives in Chicago after a decade in New York and the D.C. area.
Aleksandra Kadzielawski
Reviewed By: Aleksandra Kadzielawski
The Mortgage Reports Editor
Aleksandra is the Senior Editor at The Mortgage Reports, where she brings 10 years of experience in mortgage and real estate to help consumers discover the right path to homeownership. Aleksandra received a bachelor’s degree from DePaul University. She is also a licensed real estate agent and a member of the National Association of Realtors (NAR).