🏡 What do sellers think of upcoming changes to real estate commissions? 🏡
Ninety-four percent of home sellers support proposed updates to the commission system that would make buyers pay their own agents, even though nearly half (49%) didn’t know they paid the buyer’s agent’s commission under the traditional system.
Proposed Commission Changes | Importance of Commission | Mixed Views on Real Estate Agents | Forgoing Agents | Gaps in Home-Selling Knowledge | Stress and Optimism for Future Sellers
The real estate industry and over 1.5 million Realtors are preparing for the most significant shift in the home buying and selling process in decades.
The National Association of Realtors has reached a settlement in a series of legal cases that sought to overhaul the traditional commission structure in which buyers' and sellers' agents split a predetermined amount. This is usually equivalent to 5% to 6% of the sales price and comes directly out of the seller’s bottom line.
Under new rules, buyers would need to negotiate their own agent's compensation (much like how many sellers negotiate Realtor fees), a move that advocates hope will lead to lower rates and home prices in the long run.
The settlement will likely have a major impact on how Realtors attract and keep their clients, making the highly competitive industry even more so. That makes it even more critical for agents to understand what their customers are looking for.
Buyers could see the most immediate impact. “This change could potentially deter first-time home buyers due to the added upfront costs — potentially 1.5% to 2% in fees based on the home's sale price,” real estate agent and Clever spokesperson Steve Nicastro said. That’s up to $8,000 on a $400,000 home purchase. This may force some buyers to skip hiring an agent and try to go it alone.
But nearly all home sellers (94%) surveyed by Clever Real Estate say they support the proposed commission changes, and 88% of homeowners selling in the next year plan to use a Realtor and see them as an important part of the process.
However, the survey found more than three-quarters of home sellers (77%) say commission rates will factor into their upcoming decision to hire a real estate agent. At the same time, sellers say they’re more comfortable tackling parts of their transaction without a Realtor, such as negotiating (61%) or FSBO paperwork (59%). Two-thirds (67%) even think artificial intelligence can already outperform a human agent.
At the same time, the survey also revealed a troubling lack of knowledge among sellers about basic aspects of home sales, from the cost of commissions and who pays them to the actual duties of a real estate agent.
To find out more, Clever Real Estate surveyed 695 Americans who plan to sell their homes in the next year about their views on commissions, attributes they’re seeking in a Realtor, and their overall views of the housing market.
🏘 Key Realtor and Home Selling Statistics 🏘
- More than half of sellers (52%) who say the current commission system is unfair say it’s because they have to compensate the buyer’s agent.
- 77% say the commission rate a Realtor charges will play a role in their hiring decision.
- Home sellers actually overestimate the amount they'll pay in commission. Nearly half (49%) expect to pay 7% or more in commission, while only 1 in 3 (35%) expect to pay the typical amount of between 5% and 6%.
- Roughly 1 in 6 (16%) think they’ll pay 4% or less.
- Over one-third of home sellers (37%) would accept an offer 10% or more below market rate if they believed it could save them money on commission.
- 88% of sellers think a real estate agent is important in the home-selling process, with 60% of all respondents describing Realtors as "very important."
- Two-thirds of respondents (67%) believe real estate agents value profits over their clients’ best interests.
- Still, Realtors were the third-most trusted profession, behind only doctors and teachers and significantly ahead of journalists, lawyers, bankers, and police officers.
- 85% of home sellers believe an agent will get them a higher sale price than they would on their own.
- Among sellers who plan to use an agent, the most common ways they expect to find one are through online real estate platforms such as Zillow (60%) or internet reviews from Yelp, Google, or other sites (56%).
- Barely a third (34%) plan to find their Realtor through traditional advertising, such as TV commercials, signs, or print ads.
- The number of sellers who say they’re comfortable negotiating without an agent has risen from 48% in 2019 to 61% in 2024. A similar number (59%) say they’re comfortable handling paperwork without an agent, up from 38% in 2019.
- Two-thirds of sellers (67%) say artificial intelligence could outperform a human real estate agent.
- More than three-quarters of home sellers (77%) don’t know the tasks their Realtor is responsible for during the sale process, expecting them to take care of things handled by other real estate professionals or missing actual agent responsibilities.
- Nearly every single home seller (99%) expects stress from their home sale.
- 70% of sellers are worried that high interest rates will prevent their homes from selling at their desired price.
94% of Home Sellers Say Buyers Should Pay Their Own Agents
It’s impossible to know the full effects on the housing market if the proposed changes take effect as scheduled in mid-2024, forcing buyers to compensate their own agents. But it’s likely a win in the short term for sellers and one they recognize as such, with 94% supporting modifications to the process.
However, nearly half of respondents (49%) didn’t actually know that home sellers pay the buyer’s agent’s fee under the current system. This roughly 50-50 split was found across all demographic groups, suggesting a widespread lack of knowledge and the potential for a rude surprise on closing day.
Still, two-thirds of home sellers (66%) believe the current system where sellers pay both agents is fair. Of those who say it is unfair, roughly half (52%) say it’s because of how commissions are split, while 50% say commissions cost too much overall.
Other top complaints about traditional commission include:
- A lack of clarity about what the commission covers (45%)
- A lack of transparency in how fees are calculated (45%)
- A lack of flexibility in how commission is negotiated (45%)
- Commission rates are hard to understand (35%)
Commission Rates Are Important to Three-Quarters of Home Sellers
In the wake of these settlements and other recent changes in the real estate market, it’s no surprise that commission rates are top of mind for many sellers. Seventy-seven percent say real estate commission rates will play a role in deciding which agent to hire. Nearly two-thirds of sellers (64%) say high commission costs have even influenced whether they’d put a property on the market or the timing of doing so.
When choosing an agent, people say commission rates (47%) are even more important than other criteria, such as personality fit (44%), marketing strategies (43%), and reviews from former customers (40%).
But although sellers are paying attention to the rate and what they’re getting for that price, they’re fairly flexible about what they want and need in a Realtor. On one hand, 82% of home sellers would pay a higher commission rate to a Realtor with a strong track record of success. However, 60% would also hire low commission Realtors with less than a year’s experience to save money.
It’s a clear sign of opportunity for full-service Realtors catering to clients looking for the best, as well as discount real estate agents appealing to budget-focused sellers. Still, nearly three-quarters (72%) say they’re worried there must be a catch when an agent or broker advertises lower-than-average commission.
As significant as commission rates are to many sellers, only 1 in 3 respondents (34%) actually know what they’ll pay — typically between 5% and 6% of the final sale price. Nearly half (49%) overestimate commission costs and expect to pay 7% or more, and 1 in 6 (17%) expect to pay 4% or less.
Just over half of sellers (54%) say the true cost of commissions are costly, but 81% also say rates are fair, compared to just 19% who say they’re unfair.
This lack of familiarity with real-world commission rates can have significant consequences. More than one-third of home sellers (37%) would accept an offer 10% or more below market rate if they believed it would save them money on commissions. In reality, this decision would generally lose them roughly 4.5% or more compared to a typical sale.
Nearly a third (29%) would sell at a whopping discount of 15% or more if they thought it would save commission money.
Sellers Have Mixed Views of Realtors, but 7 in 10 Say They’re a Necessity
Even as alternative options have expanded in recent years, real estate agents are still firmly at the center of the home-selling process. About 9 in 10 home sellers (88%) say a real estate agent is important to the process. Nearly three-quarters (73%) went further, calling Realtors “inherently necessary” when selling a home.
There are some concerns, too. Two-thirds of respondents (67%) believe real estate agents value profits over their clients’ best interests, while 73% of sellers say agents tend to overinflate property values to secure a higher commission.
More than three-quarters of sellers (79%) think that real estate agents should be held to stricter ethical guidelines, and nearly half (46%) believe the standards for becoming a Realtor are too low.
Still, 81% of home sellers trust real estate agents, and they rank third in trustworthiness out of the 16 professions we evaluated. Only medical doctors and school teachers ranked higher. Realtors were trusted significantly more than journalists, police officers, bankers, and lawyers.
| Rank | Profession | Average Score (out of 10) |
| 1 | Medical doctor | 7.91 |
| 2 | School teacher | 7.79 |
| 3 | Real estate agent | 7.23 |
| 4 | Home inspector | 7.22 |
| 5 | Home builder/contractor | 7.20 |
| 6 | Police officer | 7.11 |
| 7 | Banker | 7.11 |
| 8 | Lawyer | 6.91 |
| 9 | Mortgage lender | 6.84 |
| 10 | Landlord | 6.64 |
| 11 | Journalist | 6.59 |
| 12 | Insurance salesman | 6.49 |
| 13 | House flipper | 6.42 |
| 14 | Car salesman | 6.12 |
| 15 | Telemarketer | 5.58 |
| 16 | Politician | 5.28 |
These generally favorable views may come down to dollars and cents. Eighty percent consider the “best” offer on their home to be the one with the highest purchase price — as opposed to an offer with no contingencies — and 85% of home sellers believe an agent will get them a higher sales price than they would on their own.
Most Sellers Plan to Find Agents Online or Through Friends and Family
The real estate market continues to see profound changes in how home sellers and agents find one another. A majority of sellers who plan to use a Realtor expect to find that agent via online real estate platforms such as Zillow or Clever Real Estate (60%), online reviews (56%), or a personal relationship with an agent (50%).
Other top methods include:
- Online search: 44%
- Referrals from friends or word of mouth: 42%
- Social media: 36%
Nearly 9 in 10 sellers (87%) say they’d be more likely to trust a real estate agent recommended by family or friends. This reflects the notable leg-up agents can reap from encouraging past customers to refer those they know.
Meanwhile, barely a third (34%) plan to find their Realtor through traditional advertising, such as TV commercials, signs, or print ads.
A majority of home sellers who plan to work with an agent want to meet their agent in person the first time they interact (56%). But most (63%) would prefer to avoid in-person meetings after that, with many sellers choosing phone calls (30%) and video chats (20%) for communication.
Roughly half of all sellers who plan to use an agent (49%) expect to hear from them multiple times per week — including 1 in 7 (14%) who want at least daily updates — regardless of whether there is news or an offer on their property.
Experience, Market Knowledge, and Tech Savviness Are Most-Desired Realtor Traits
Commission is a significant factor for many sellers, but it's not the only one. A majority of sellers who plan to work with an agent see knowledge of current market conditions (55%), negotiation skills (53%), a track record of successful sales (52%), experience in the local market (52%), and communication and availability (52%) as important traits to look for when choosing an agent.
Eighty percent say they’d rather have an agent who focuses on innovative technologies and marketing strategies over traditional ones. Most sellers think the best way to find a buyer for their home is through online advertising (36%) or an introduction from their agent (32%), with all other options lagging far behind.
Fewer than 1 in 10 respondents believed old-school methods, such as an open house (9%) or “For Sale” signs (6%), are the top way to find a buyer.
More Sellers Are Comfortable Skipping a Realtor or Using Alternatives Than In The Past
As crucial as many feel Realtors are, there’s no denying that when and why they’re needed is changing. Over the past few years, people have become more comfortable not using an agent for home sale tasks.
For example, 61% of sellers say they can negotiate with the buyer on their own, compared to 54% in 2022 and 48% in 2019. About 59% of sellers also feel they can handle paperwork without an agent, a steep increase from 44% in 2022 and 38% in 2019.
About 1 in 8 (12%) say they won’t use a real estate agent at all when selling their home.
Of those who plan on selling a house without a Realtor, 60% say they’re doing so because real estate commissions are too expensive.
Other frequently cited reasons for skipping a Realtor include:
- Wanting more control over the home-selling process (44%)
- Having past real estate experience and ability to handle the sale themselves (35%)
- Having bad experiences with agents (33%)
- A desire to sell faster than with an agent (33%)
- A lack of trust in agents (21%)
- Belief agents are inconvenient to use (20%)
Among those not planning to use a Realtor, the most common alternative is selling to a cash buyer company, such as We Buy Ugly Houses, MarketPro, or others. Twenty-nine percent choose this option, while 18% plan to use an iBuyer, such as Opendoor or Offerpad. As a result, these “on-demand” home-selling options comprise nearly half (47%) of non-agent sales.
Just a quarter (26%) will try a for-sale-by-owner arrangement instead.
More Than Three-Quarters of Sellers Would Use AI in Their Home Sale
Artificial intelligence is promising to transform the way many age-old industries operate, and real estate is undoubtedly among them. More than three-quarters of home sellers (78%) are willing to use AI to find buyers, up from 73% in 2022 and 51% in 2019.
Two-thirds (67%) seem ready to let AI take over the entire process, saying it could outperform a human real estate agent. That percentage has grown 30 points since home sellers were asked in 2019 (37%).
The increase may be related to the growing familiarity that ordinary people have with AI, thanks to the rapid expansion of services such ChatGPT.
Major Gaps Exist in Sellers’ Real Estate Knowledge
For many people, buying and selling real estate is apparently a mystery — including a notable number of those who already own a home.
Most sellers are able to pick out essential tasks their real estate agent is responsible for, such as negotiating offers, setting a listing price, and filling out paperwork. But 77% of potential home sellers think their agents should complete tasks handled by other real estate professionals or aren’t aware of some responsibilities that do belong to their agent.
Around a third of home sellers believe agents are responsible for facilitating the money changing hands between buyer and seller (38%), conducting the home inspection (34%), or securing mortgage rates for the buyer (31%).
Not a single respondent correctly identified all of an agent’s actual responsibilities and those that belong to others in the sale process.
Meanwhile, a lack of real estate knowledge could also quickly leave many optimistic sellers feeling anxious. About 64% of respondents believe their home will sell after 10 or fewer showings, lower than the 10 to 25 showings it typically takes to sell a home.
Just 1 in 20 (5%) expect to host 20 or more showings, while more than a quarter (28%) expect five or fewer.
However, no respondents were bold enough to say they believed they'd need only one showing.
There’s another critical knowledge gap when it comes to differentiating between a Realtor and a real estate agent. Although the terms are often used interchangeably, there are important distinctions that 70% of sellers believe they understand.
However, only 25% could accurately identify that difference between Realtors and real estate agents, which is that Realtors are licensed agents who have also joined the National Association of Realtors.
Membership in the NAR requires Realtors to complete additional ethics training and abide by a professional code of ethics and standards when dealing with clients. NAR membership is also often required to use the local multiple listing service, the starting point for the vast majority of home sales.
Other common misconceptions among home sellers include:
- Expecting to pay 10% or more in commission on their home sale (31%)
- Believing buyers paid their own agents (27%)
- Thinking the buyer and seller split the buyer’s agent fee (18%)
99% of Home Sellers are Stressed About the Selling Process
Homeowners stressing about the prospect of selling their homes should know they’re not alone. In fact, virtually every respondent (99%) says they expect to experience some stress about their home sale. But this stress comes from a variety of sources, over which sellers have varying degrees of control.
Many stressful aspects involve parts of the sale that experienced Realtors have significant influence over, including pricing the house correctly (40%), attracting buyers (37%), filling out legal paperwork (33%), and dealing with a lower-than-expected appraisal (32%). Nearly a third (31%) are stressed about handling flaws or problems with their property, another issue where qualified Realtors can provide guidance.
Other major stressors include finding agents themselves (39%). A quarter of sellers (25%) simply stress about the number of people who poke around the home during showings or open houses.
Three-Quarters of Sellers Are Optimistic About the Housing Market
As stressed as homeowners may be about their individual sales, they at least seem to find some reassurance from the housing market. More than three-quarters of sellers (76%) believe it’s a good time to sell a house.
And they’re relatively optimistic about what will happen once their homes hit the market. Forty-one percent believe they’ll be able to negotiate a better price or fewer contingencies, while more than a third (35%) believe they’ll get an offer over asking price or an offer the same day the home is listed. About a third (31%) believe their home will spark a bidding war between buyers.
These may be somewhat rosy projections. February 2024 NAR data shows just 20% of homes sold over asking price, and homes received the same 2.7 offers on average as they did a year ago. But that’s still more of a bidding battle than a bidding war compared to the nearly five offers homes received this same time in 2022.
Many sellers recognize that the market is off its peak from recent years. About 82% wish they had sold their house when the market was more seller-friendly.
Meanwhile, 70% of sellers are worried that high interest rates will prevent their homes from selling at their desired price. Based on his experience as an agent, Clever’s Steve Nicastro says the reality of the changes is setting in.
“The market has transitioned from a scorching hot sellers' market in 2021-2023 to what can now be described as a more normalized sellers' market," Nicastro said. "Despite this shift, prices remain elevated, inventory levels are relatively low by historical standards, and properties spend less time on the market.”
Sellers with a particular number in mind may be inclined to be patient. Although 56% of home sellers believe the market is in a bubble, barely a third (34%) think it will crash this year. With this belief as a backdrop, Nicastro sees some homeowners potentially holding off on listing their homes until after the proposed NAR settlement changes officially take effect in the hopes of saving thousands in fees.
Methodology
Clever Real Estate conducted a survey of 695 American adults who plan to sell their home in the next 12 months, asking them questions about the real estate market and real estate agents. This survey was conducted from Feb. 28 to March 14, 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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FAQs
What does a Realtor do?
Some essential tasks a real estate agent is responsible for include negotiating offers, helping set a listing price, filling out paperwork, and listing a home for sale on the MLS and real estate websites. In some cases, they also identify repairs or improvements that could help your house sell for more money. Learn more.
How do you find a Realtor?
A majority of sellers who plan to use a Realtor expect to find that agent via online real estate platforms such as Zillow or Clever Real Estate (60%), online reviews (56%), or a personal relationship with an agent (50%). Other top methods include online searches (44%), referrals from friends or word of mouth (42%), and social media (36%). Learn more.
What’s the average commission rate paid by home sellers?
The commission paid by home sellers under the current system is typically between 5% and 6% of the final sales price. That’s $20,000 to $24,000 on a $400,000 home. Learn more.
What is the NAR lawsuit about?
The National Association of Realtors has reached a settlement in a series of legal cases that sought to change the traditional commission structure, where the agents for buyers and sellers split a predetermined amount paid by the seller. Under new rules, buyers would need to negotiate their own compensation agreements with their agents. Learn more.