HousingWireHousingWire
The new rules mandated by the National Association of Realtors’ (NAR) antitrust settlement are designed to encourage more negotiations for buyer agent commissions. Almost a month after the rules went into effect, that appears to be happening.
That’s according to Redfin, which interviewed dozens of its agents about what they’re seeing on the ground in regard to buyer commission conversations. The interviews revealed that buyers in some markets are more open to taking on some of the cost of compensating their agents.
“Like with the amount of earnest money deposit or including an inspection contingency, the amount the buyer is asking the seller to pay her agent is a term that impacts the strength of the offer,” Redfin chief economist Daryl Fairweather said in a statement. “That will likely drive fees down over time.”
While Redfin agents are seeing more negotiations, it’s more common in some markets than others. In markets like Austin that have stalled due to less buyer demand, sellers are more likely to take on the cost of paying a buyer’s agent to make their home more attractive.
In markets with less inventory and more demand from buyers, sellers are taking advantage of this demand in negotiations on commissions. In general, however, Redfin agents still see sellers willing to pay for buyer commissions.
“We’ve found a tale of two markets,” Fairweather said.
Transparency on commissions with home buyers and sellers was another goal of the NAR settlement rules, and Redfin said that’s happening too. Instead of negotiating on the MLS, agents are engaging through phone calls and text messages.
Redfin previously reported that buyer agent commission rates have started to fall. But the new average figure of 2.55%, just before the new rules took effect Aug. 17, is down only slightly from 2.62% in January. But different brokerages are experiencing different things.
On its second-quarter earnings call, Compass reported that it has seen virtually no change in buyer agent commissions, stating that fears “have simply not materialized.”
The $418 million settlement agreed to by NAR to close a web of antitrust lawsuits related to agent compensation mandates that listing agents can no longer make unilateral offers of compensation to buyer agents on the MLS. It also requires home shoppers to sign an agreement on compensation with their agent before they can tour a home. But this was already a requirement in some states.
