A landmark legal settlement with the National Association of Realtors (NAR) has thrown real estate commission forecasts into uncertainty. Some experts predict falling fees — and potentially home prices. Others say: not so fast.
Some research suggests the new commission-setting landscape might reduce commissions and, therefore, the price of a home. Other experts foresee commission changes leading to higher home prices.
Ken Johnson, finance professor at the University of Mississippi, offers a middle-ground view:
“It is highly unlikely that the recent settlement will have any impact on commission rates. … Until something changes the underlying cost of doing business, it will be very difficult for agents to compete in terms of price.”
The Urban Institute agrees: Lower commissions might slightly reduce homebuying costs, but the ongoing housing shortage means it likely won’t improve affordability in a meaningful way.
What Changed Under the NAR Settlement
The 2024 settlement requires NAR to pay $418 million in damages and implement new rules, including:
Buyer’s agents must outline their compensation in writing before showing homes.
Agents must clearly state that commissions are negotiable.
Sellers are no longer required to cover both agents’ commissions.
Also gone: the practice of quoting a combined commission. Agents now must break out what each side earns.
What Commissions Could Look Like
Steve Brobeck, senior fellow at the Consumer Federation of America, believes change is coming — slowly. He expects the typical 5-6 percent total commission to drop to around 4 percent, with each agent earning about 2 percent.
“More buyers and sellers will learn they can negotiate rates down, and widespread agent collusion will begin to break down,” he said.
A LendingTree survey backs that up: 64 percent of buyers and sellers who negotiated commissions in 2024 got a discount.
Still, behavior — not policy — will drive change.
“The main reason experts are uncertain about future rates is our inability to predict how active consumers will be in negotiating,” Brobeck said.
Early Impact: Muted
Despite the rule changes, commissions haven’t budged much. Some, in fact, have risen slightly due to the workload involved with helping first-time buyers, said Toby Schifsky, VP of real estate education at Kaplan.
On higher-end homes, though, commissions may be slipping.
Either way, Schifsky notes that a fraction of a percentage point matters little in the grand scheme.
“A quarter-point or half-point savings on a commission ends up being minuscule compared to everything else.”
Advice for Buyers and Sellers
If commission rates do fall, the benefit to buyers and sellers could be real — but not guaranteed.
“The way the settlement is structured may limit its impact,” said John Hatfield, finance professor at the University of Texas at Austin. “Don’t assume all buyer’s agents charge the same rate.”
Hatfield urges consumers to be aware of how agents are compensated — and to negotiate.
Schifsky echoes that.
“Make sure you’re interviewing agents that demonstrate their value, that you trust, and who have your best interest in mind.”
