HousingWireHousingWire
In the six months since news of the National Association of Realtors‘ (NAR) nationwide commission lawsuit settlement broke, agent attitudes toward the settlement’s required business practice changes have only slightly improved. This is according to a study published earlier this week by real estate technology firm Clever Real Estate.
Clever surveyed 516 real estate agents in late August and early September, after the changes were implemented on Aug. 17. The results showed that 64% of agents currently oppose the commission structure changes mandated in the settlement agreement, which is down from 70% in Clever’s previous survey conducted in April 2024.
Additionally, the number of agents who believe the settlement will harm first-time homebuyers has dropped by 12 percentage points since April to 76% of agents. The share of respondents who believe the changes will lead agents to leave the industry has also come down, dropping by 9 percentage points to 86% of agents surveyed.
Despite the improvements in agent sentiment, 72% of agents reported that they feel the settlement will have a negative impact on the industry, while 20% are anticipating a positive impact. In addition, 48% of agents said their overall outlook on their real estate career has become more pessimistic since the business practice changes went into effect in mid-August, compared to 16% who report feeling more optimistic.
The majority of agents (60%) also reported that they do not like that they can no longer advertise offers of buyer agent compensation on the MLS, while 20% like the change. Similarly, 59% of agents don’t like that commission costs may be shifted directly to buyers, compared to 19% of agents who view this change favorably.
The settlement’s other major change was to require agents to have a signed buyer representation agreement prior to taking a client on a home tour. In contrast to removing offers of compensation from the MLS, 57% of the agents surveyed like having buyer agency agreements signed early on in their relationships with clients.
Prior to this rule being implemented, only 14% of agents reported having clients immediately sign a buyer representation agreement. Another 42% said they did not have clients sign an agreement until an offer was made or was about to be submitted.
The Clever survey also included responses from 1,000 current homeowners and prospective buyers. Despite the requirement to have buyers sign these agreements prior to going on their first home tour, 71% of potential buyers surveyed reported touring a property with an agent without first signing a buyer agency agreement.
When it comes to commission rates, listing agents say they hope to have their seller offer an average of 2.6% in buyer’s agent compensation, down 0.13% from the average prior to the business practice changes.
On the buy side, agents also appear to be accepting of lower commission rates, with 55% of respondents reporting that 2% would be the lowest rate they would accept. But buyer agents also said they would accept a lower-than-average commission if a homeowner has multiple properties to sell (47%), the homeowner also plans to buy with them (47%), or there is high competition for clients (44%).
The most common reasons an agent would insist on a higher commission include if a seller wants a premium marketing package (52%), if a seller has unrealistic expectations (45%), or if the property is far away or inconvenient (41%). Overall, the listing agents surveyed plan to ask for an average commission of 2.78% in the post-NAR settlement world, in line with the 2.81% average before the settlement changes went into effect.
In addition to considering lower commissions, most agents (83%) are also open to experimenting with new business strategies in the post-settlement world, with the most common strategy being to use short-term showing agreements for buyers (43%). Other popular strategies include providing a detailed cost breakdown for clients (42%) and adjusting their commission structure (40%).
While commissions may be coming down, 90% of agents surveyed said they will remain open to working with buyers moving forward, but 36% said they are less likely to work with buyers now than they were previously.
Despite their willingness to work with buyers, the majority of agents have concerns about how the business practice changes will impact a buyer’s likelihood of using a buyer’s agent. About two-thirds say they believe the settlement will cause buyers to be more hesitant to use an agent.
But agent fears may not be warranted as 71% of potential buyers report that they still plan to use an agent to buy a home. Still, 49% of prospective buyers surveyed say that having to figure out their buyer’s agent’s compensation — even if the seller is willing to cover it — lowers the likelihood they will end up actually buying a home.
Additionally, 66% of buyers said they would change their homebuying strategy if they had to pay their agent’s commission out of pocket. Roughly the same share reported that they are considering alternatives to traditional buyer agents, such as online platforms or discount brokerages.
Even with these concerns, 53% of future buyers surveyed said they support the business practice changes, while 67% of current homeowners said they support the changes. This is in line with the 68% of sellers who said they believe the former commission structure was unfair. Additionally, 66% of homeowners who say that they intend to sell in the next year are more likely to sell now that it is clear that they are not obligated to pay for the buyer’s representation.
