Study finds real estate commission rates unchanged after NAR settlement

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Despite industry analysts’ predictions that real estate commission rates would fall following the settlement of lawsuits against the National Association of Realtors, a new study finds commission rates are so far holding steady. 

Rule changes for NAR members that went into effect in August were a result of a $418 million settlement that the trade group agreed to in March to resolve several class-action lawsuits that challenged the industry’s cooperative compensation structure. The lawsuits, filed by groups of home sellers, claimed that they were forced to pay artificially inflated commissions to agents in the sales of their homes, mostly due to part of the commissions going to compensate agents representing homebuyers. 

And while it was widely reported in the media that the rule changes could save homebuyers and sellers thousands of dollars in commissions, a study of the transactions from 625 real estate offices by AccountTECH found that two months after the NAR rule changes commission rates, those rates show almost no year-over-year movement. 

For the first 60 days after the NAR rule changes went into effect, the average commission rate charged to home sellers was 2.738%, a slight increase from the 2.724% rate from the same dates in 2023. The findings suggest that, so far, the settlement has not led to any meaningful change in commission rates for sellers. 

For that same period, the average commission rate charged to buyers was 2.486%, a slight decrease from the 2.541% rate for those same dates in 2023. Though the small change in the average commission rate charged to buyers is not significant, there was a drop in buyer-side transactions compared with a year ago. AccountTECH found there were 17,358 buyer-side transactions among the 625 real estate offices studied during the first 60 days after the implementation of the NAR rule changes. That’s a drop of about 10 percent from the 19,274 buyer-side transactions recorded in the same period in 2023. 

While the year-over-year reduction in buyer-side transactions might be attributed to the fallout from the NAR settlement, AccountTECH points out that interest rates, inventory or general economic conditions are just as likely to be a reason for the decline. 

Only transactions where the date the transaction went under agreement was within 60 days of the NAR settlement were included in the AccountTECH study. The study focused solely on sales transactions, excluding rental commissions or any other type of commission income. Outliers, defined as cases where the commission charged was over 5% or below 0.5%, were also excluded.