2024 Data: Realtors and Public Sharply Split Over Real Estate Commission Changes From NAR Settlement

Commission Changes: Public vs. Agents | Problems for First-Time Home Buyers | Few Changes for Sellers | Real Estate Agent Worries | NAR Settlement Misinformation

Although the full implications of the recent settlement involving the National Association of Realtors are still unknown, two things have become clear: It’s poised to substantially change the process of buying and selling homes, and real estate agents and the public are coming to very different conclusions about its impact. 

The most noticeable changes center on the buyer’s agent commission. Listing agents will no longer be obligated to offer a commission to buyer’s agents and can’t advertise a set commission on the listing. Although some sellers may continue to offer buyer’s agent commission, in other cases, this change will force home buyers to pay their own Realtors out of pocket or engage in additional negotiations with the seller to cover it. 

That’s a stark departure from the traditional system, in which sellers paid both agents a set percentage decided in advance and included on the multiple listing service, typically directly out of the proceeds of their home sale. 

Supporters of the overhaul believe it’ll help lower overall commission rates and home prices, as well as save sellers significant amounts of cash. Others point to the potential for increased competition and transparency in real estate transactions. 

Opponents counter that it has the potential to add thousands in out-of-pocket costs for buyers — especially first-timers — slow down the pace of sales, and cause many Realtors to lose income or drop out of the industry entirely. 

Although two-thirds of the public (67%) are in favor of this fundamental reshaping of commissions, 7 in 10 real estate agents (70%) oppose it. However, a closer look reveals a more complicated picture, including concerns about costs for first-time buyers and a mix of worries and confidence from real estate agents.

The survey also revealed relatively few members of the public — just 36% — are aware of the NAR settlement and the importance of the changes ahead. In fact, many people, including those who’ve bought and sold homes, showed major gaps in how commission is currently paid.

To find out more, Clever Real Estate surveyed 1,000 Americans about their views on buying and selling homes amid the changing market. In addition, we asked 331 practicing real estate agents from the Clever Real Estate network — the vast majority of whom represent both buyers and sellers — about the impact on the residential real estate landscape.

Americans and Realtors Have Strong — but Opposing — Feelings on Commission Changes

A successful partnership between a client and a real estate agent means both sides need to be on the same page. But on the issue of commission changes, they couldn't be further apart. 

Two-thirds of the general public (67%) support the upcoming commission changes, while 70% of agents oppose them. The percentage of public support is nearly 10 points apart for those who have bought homes (70%) and those who haven’t (61%).  

Among members of the public who support the changes, 44% say it’s because they believe it would reduce the financial burden on sellers, while 41% think it would create a more level playing field between buyers and sellers or increase fairness and transparency in transactions.

Other frequently cited reasons for support include:

• It will improve trust in the real estate industry (32%)
• It will give consumers more flexibility in choosing services (29%)
• It will incentivize agents to provide higher-quality services (28%)

Those who oppose the overhaul believe it would increase the burden on home buyers (47%), discourage first-time buyers from entering the market (36%), and create uncertainty in the real estate market (29%). 

Meanwhile, a quarter of those opposed (25%) worry that it would make it harder for new real estate agents to enter the business, while more than 1 in 5 think it could erode the trust between clients and agents (22%) or prevent small brokerages from competing with big real estate companies (22%). 

More than 3 in 5 Americans (61%) agree with the general premise of the NAR lawsuit, which alleges that home sellers having to pay the buyer’s agent commission is unfair and an anti-competitive practice. It’s a different story among real estate professionals. Approximately 89% of surveyed agents do not believe the allegations made against the NAR are valid. 

About 9 in 10 (91%) Americans believe the NAR settlement will have some impact on future home buyers and home sellers, with the most commonly cited impacts being lower commission rates (30%) and increased competition (26%). 

Agents agree with the first point: 60% of those surveyed are concerned about an expected decrease in average commission rates for buyer’s agents that could affect their income.

Overall, 71% of surveyed agents believe the NAR settlement will have a negative impact on the real estate industry. In comparison, the public is almost evenly split, with 40% saying it’ll have negative effects and 39% saying it’ll have positive effects. 

Winners and Losers of the NAR Settlement

Like any significant industry change, there will naturally be some who come out ahead and some who suffer. But real estate agents and the general public have different perspectives on how the settlement's impact will shake out. 

Among the general public, 59% see home sellers benefiting from the commission overhaul. A 38% plurality also considers the settlement to be a good thing for listing agents.

It’s a much less optimistic picture among real estate professionals, though. Agents didn’t believe any group — buyers, first-time buyers, sellers, buyer’s agents, seller’s agents, large brokerages, small or independent brokerages, mortgage lenders, or the National Association of Realtors — would benefit more from the overhaul than be hurt by it.

When it comes to those who will lose out as a result of the changes, 82% of real estate agents, unsurprisingly, believe home buyers will be hurt. However, a 42% plurality of agents also believe the changes will negatively impact home sellers. 

More than 8 in 10 agents (85%) see the overhaul hurting buyer’s agents, while they’re about evenly split on the impact on listing agents. About 36% believe these agents will be hurt, while 35% believe they will be helped. This is notably different from the general public, of whom only 40% believe the changes will hurt buyer’s agents. 

Real estate agents think both large (56%) and small or independent brokerages (63%) will be hurt, too. Americans agree about the impact on small brokerages, with 40% saying they'll be hurt and 29% saying they'll benefit. They're about evenly split on larger real estate companies, with 31% saying they'll be hurt and 28% saying they'll benefit. Perhaps least surprising of all, more than three-quarters of agents (78%) believe the settlement hurts the National Association of Realtors.

About half of the public (48%) view home sellers as the biggest winners of the rule changes. On the flip side, Americans see home buyers (39%) and real estate agents (41%) as the biggest losers.

Two-Thirds of First-Time Home Buyers Couldn’t Afford to Pay Their Agents

One of the groups likely to see the most immediate and profound impact of these changes is first-time buyers. While those simultaneously listing a home and purchasing another can essentially replace one commission payment with another, those who don’t already own a home may need to come up with these additional commission costs out of pocket.  

Based on the typical 2%-3% buyer's agent commission rate, that would add between $8,416 and $12,624 to the cost of purchasing a $420,800 home, the median price nationwide in the first quarter of 2024.

When added to other closing costs, which average 3% to 5% for U.S. home buyers, the results are predictable but no less shocking. Two-thirds of would-be first-time home buyers (66%) indicated they wouldn’t be able to afford their agent’s commission in addition to the down payment and other expenses. 

For many, it could be yet another blow among numerous others that have made it more and more difficult to afford a home. Trouble for first-time buyers is clearly the expectation of real estate agents, including 88% of those surveyed. 

Those include broker Jim Holbrook, who has worked in real estate for two decades, serving the Temecula, California, area. He opposes the changes, in part, based on these impacts. 

“Most buyers are not going to pay out of their pockets or finance their agent commission,” Holbrook said. 

Despite the added responsibilities and potential costs, 47% of Americans say the settlement won’t affect whether they use a Realtor to buy a house. Only 28% say it would make them less likely to buy with an agent.

Over a quarter of sellers forgoing an agent (27%) will attempt a traditional for-sale-by-owner (FSBO) transaction, while 1 in 6 (16%) will try a flat-fee MLS, where sellers pay for a listing but don’t have agent representation.

Commission Confusion Among First-Time Buyers and Homeowners Alike

More so than others, first-timers may not understand the significance of commission in real estate. Just 17% of Americans who have never bought a home can identify the typical total commission rate of 5% to 6%. 

Those who have purchased or sold homes were about 2x more likely to know the expected rates. Nevertheless, about two-thirds of past buyers (67%) and sellers (66%) still couldn’t do so, showing that experience may only provide a limited education for some homeowners.

Meanwhile, a majority of Americans (57%) confess to not understanding how buyer’s agent commission fees are paid under the traditional structure. Overall, just 1 in 16 Americans (6%) correctly answered that, under the current commission system, buyers pay nothing to their agents. 

This should be a major red flag and an opportunity to educate for agents, three-quarters (75%) of whom believe that their clients understand commission rates ahead of time. 

Having to negotiate a compensation agreement with a buyer’s agent will be a new experience for many buyers, including those who have owned homes before. Fewer than a third of respondents (30%) had negotiated commission with their Realtor.  

It’s been a worthwhile tactic for a majority of buyers, though. Fifty-five percent of those who tried say it resulted in their agent lowering their commission rate.

In any case, it’s not something most Americans want to worry about. More than half (55%) believe that real estate commission rates should be regulated by the government. 

That’s no secret to agent Adrian Alvarado, who serves medium- to high-priced clients in the Southern California area. He told Clever that he sees outside factors, such as government regulation and new technology, playing a bigger role in determining future commission rates.

Little Impact on Home Sellers – Other Than Extra Cash

With the potential for thousands of dollars in savings, sellers are naturally supportive of the overhaul, with more than 9 in 10 saying so. But almost half of Americans (49%) say the settlement changes won’t impact their decision to use a Realtor to sell in the future. The other half is almost evenly split between less likely (24%) and more likely (28%) to use an agent.

Sellers may have some concerns over news coverage suggesting that the commission overhaul could lead to lower home prices, as some experts argue inflated commission was factored into the prices set by homeowners. But according to real estate agents, sellers can rest easy. Just 15% of them expect home prices to fall because of the changes. 

Lower prices aren’t the only potential downside. A majority of real estate agents (56%) believe the average number of days a property spends on the market will increase as a result of the settlement. 

Nationally, this number sits at around 50 days, far higher than the roughly 30 days on market during the summers of 2021 and 2022 as post-pandemic buyers rapidly snapped up homes. More days on the market naturally lead to less flexibility and often higher costs for sellers, as well as less leverage in negotiations with potential buyers. 

Almost 6 in 10 Agents Expect the NAR Settlement to Hurt Business  

As the ones on the front lines of the changes, there’s no shortage of passionate feelings about the NAR settlement in the real estate industry. About 7 in 10 agents (70%) oppose the overhaul, including 46% who feel strongly opposed to the changes. Just 7% strongly support them. 

Only 15% believe the commission changes will have a positive impact on their business, while almost 6 in 10 (58%) think it will have negative results. About 60% anticipate difficulties negotiating fees directly with clients because of the settlement, while around half (52%) are considering offering additional services to stay competitive.  

“Our major shift will be explaining the agency agreement to buyers prior to beginning the home-buying journey," Alvarado said. "It’s no different than explaining to a seller the listing agreement and fees that are paid through the transaction. Most agents avoid compensation conversations when representing buyers, and that will change with the industry change. ”

However, it seems like most agents believe others will feel the worst impacts. Even after the NAR lawsuit, 51% of surveyed agents feel optimistic about their career in the real estate industry, compared to just 21% who feel pessimistic.

Almost all agents (93%) feel prepared to adapt to the changes. However, a similarly high percentage (95%) expect that the new commission structure will cause Realtors to leave the industry. At the same time, 61% of agents expect the settlement to increase competition among buyer’s agents.

“Agents who don't want to change and are already looking for workarounds won't make it,” said Carl Gresen, a Realtor with 25 years of experience who helps clients buy and sell about 70 properties per year in the Tampa Bay area. 

However, as a broker, Holbrook doesn’t believe there will be much of an impact overall, as both agents will still need to be compensated for their work. 

“I believe we need all buyer agents to bring buyers to our listings, and to think a listing agent can do it all is naive,” he said.

Rhonda DuBois, an agent in the Maricopa County area of Arizona for nearly three decades, agrees. “Seasoned Realtors will let the sellers know the value in paying for a co-broke fee,” she said. 

In the end, a majority of real estate agents (54%) expect buyer’s agent commission rates to be about the same after the changes take effect, while 75% say the same for listing agent commission rates. 

However, lower rates aren’t out of the question. More than 1 in 5 agents (22%) expect buyer’s agent rates to drop to 1.5% or less, a notable decline from the 2.66% average today. About 8 in 10 (80%) listing agents say they won’t advise clients to lower their buyer’s agent commission offers.

Some listing agents, such as Paul Smith of the El Paso, Texas, area, see the potential for a slowdown in the immediate aftermath of the changes as both sides figure out the best strategies moving forward. 

But a year from now, “we’ll have a completely streamlined process and documentation to address the changes the lawsuit set in motion," he said. "There will be a shakeup of agents that are not 100% invested in this as a career, and processes that make it easier for buyers to handle transactions on their own will crop up.“ 

Still, with commission serving as the primary source of most agents’ income, the potential for small changes leading to significant income losses or gains can’t be ignored.

Half of Americans Think Real Estate Agents Deserve a Raise

In the wake of the NAR settlement, Americans remain split in their perspectives on Realtors. Just over half (53%) believe they’re honest, but 37% say they’ve had a negative experience with an agent. 

Nearly half (43%) say they don’t think commission rates are justified given the services agents provide, but 1 in 4 (25%) say they’ve still felt pressured to accept a higher commission rate. Despite this, about 1 in 5 Americans (20%) worry the upcoming overhaul could cause real estate agents to lose their jobs or face a cut in their income. 

Whatever else the public may think about Realtors, they don’t doubt that they deserve their paychecks. More than three-quarters of Americans believe that seller’s agents (78%) and buyer’s agents (77%) should make at least as much in commission as they currently make, with almost half (48%) believing that both types of agents should make more than they currently do.

This is true even as 83% of Americans overestimate how much the average real estate agent makes. A third of respondents (33%) believe the typical agent pulls in a six-figure salary of $100,000 or more per year. More than half (54%) think it’s at least $80,000. 

Outside of top performers or high-value markets, most real-life Realtors don't come close to those numbers. The average real estate agent makes $46,280 annually, according to Salary.com, not far off from the national median income of $40,480. 

Just 1 in 20 Americans knew this, with only 5% correctly estimated that the typical Realtor’s income is between $40,000 and $49,999 per year.

Real estate agents should heed some warning signs for their business, though. A majority of Americans would be willing to buy (57%) or sell (52%) without a real estate agent, and 62% would consider alternative methods, such as online platforms or discount brokers. Still, more than two-thirds (69%) of those who’ve used an agent to buy and sell in the past say they’re satisfied with the services.

Nearly 2 in 3 Americans Have Not Heard About NAR Lawsuit

Although the public may be broadly supportive of these changes, it’s also apparent that they don’t completely understand the settlement, its impact, and important parts of the real estate market. 
​​Barely 1 in 3 Americans (36%) are aware of the NAR commission lawsuit. Just 23% of those who heard about the settlement have actively sought out information to learn more about it. That’s only about 1 in 12 (8%) of all Americans. An overwhelming 79% have not noticed any significant news coverage of the lawsuit and ensuing changes.

The silver lining is that 70% of real estate agents say they’ve fielded questions from current clients about the NAR settlement and its impact on commission, meaning the most engaged potential buyers and sellers are taking notice. But that doesn’t mean they’re drawing the right conclusions, according to Gresen. 

“They have no clue," he said. "Most just read headlines and think they don't need to pay buyer agent commission now. Of course, some have no idea anything is going on.”  

As for the rest of the public, there are some significant gaps in knowledge to contend with, too. Half of respondents (50%) say they understand real estate fees, but only 27% know commission typically adds up to 5% to 6% of the final sale price. About a fifth (21%) think it's more, and a third (34%) think it's less, with 18% confessing they don’t know.

Even experience with the process doesn’t seem to help much. Among Americans who have sold homes, 36% believe they paid less than 5% in total commission. On the other hand, 1 in 10 (10%) think they paid 8% or more. Their actual rate was likely the standard 5% to 6% of the final sale price, but just 34% say that's how much they paid. 

Although they might not know much about the settlement, Americans have thoughts on where the $418 million resulting from it should go.

Half (50%) believe it should be used to reimburse those who sold homes under the previous commission setup, while 46% would like to see it support first-time home buyer assistance programs. About a third (35%) favor funding educational services on basic personal finance and how buying and selling homes works.

With this in mind, they’ll likely have a mixed view of how the money will actually be spent. It’ll first be used to pay off legal fees related to the settlement, an option only favored by 22% of respondents. The remaining funds will go toward a reimbursement program for recent sellers, but other options likely won’t become a reality.  

Although these changes represent the biggest shakeup in the real estate industry in decades, Americans aren’t changing their plans because of them. Nearly two-thirds of respondents (64%) say the NAR settlement hasn’t made them alter their timeline for a home purchase or sale. 

About 1 in 5 (21%) are slowing down their process, presumably sellers looking to save on commission. Only 15% are speeding things up, likely buyers looking to get a deal done before they’ll potentially be on the hook for thousands in extra costs. 

Those looking for guidance may want to ask those who have bought homes in the past. Among this group, 57% say they would have changed their home-buying strategy if they were responsible for their own agent’s compensation.

Methodology

Clever Real Estate conducted a survey of 1,000 American adults, asking them about their views on buying and selling homes. This survey was conducted April 18 and 19, 2024.

In addition, Clever Real Estate conducted a second survey of 331 verified practicing real estate agents, asking for their views on the current landscape of the residential real estate industry.  This survey was conducted April 18 through 24, 2024.

About Clever

Since 2017, Clever Real Estate has been on a mission to make selling or buying a home easier and more affordable for everyone. 12 million annual readers rely on Clever's library of educational content and data-driven research to make smarter real estate decisions — and to date, Clever has helped consumers save more than $82 million on realtor fees. Clever's research has been featured in The New York Times, Business Insider, Inman, Housing Wire, and many more.

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