The NAR settlement has introduced some changes to how buyer’s agent compensation is handled, but in practice, the real estate market hasn’t seen a dramatic reduction in commission rates being offered by sellers. Instead, what we’re observing is a shift toward negotiating commissions between buyer’s agents, their clients, and sellers, while the overall process remains largely business as usual.
Seller Response: Compensation Rates Remain Similar
Contrary to concerns about potential reductions in buyer’s agent commissions, most sellers are still offering compensation similar to what they would have previously. 2.5% to 3% commission that has long been negotiated in the industry is still common. Sellers are focused on their bottom line—the net amount they take home after the sale. As a result, instead of cutting commissions, sellers may negotiate credits or other terms to meet the buyer’s needs while protecting their own financial interests.
For example, in competitive markets, if a buyer’s agent requests both a 3% commission and a credit for the buyer, sellers may counter by offering a slightly reduced commission rate—perhaps 2%. This allows the seller to maintain their profit margin without substantially cutting into the buyer’s agent compensation.
Buyers Agents: Flexibility in Commission
In this new environment, buyer’s agents are finding flexibility in how their commission is structured. While sellers may negotiate commissions, some agents are negotiating for their clients to cover the difference. For instance, if a seller agrees to pay 2.5% but the agent typically charges 3%, the agent may ask their buyer to cover the remaining 1%.
In some cases, agents may decide to reduce their commission to align with the seller’s offer, especially if it helps close the deal. However, the option for the buyer to contribute to the agent’s compensation is becoming more common, particularly in cases where the buyer’s budget allows for flexibility in costs.
Negotiations Over Commission vs. Credits
What we’re also seeing is that, rather than aggressively negotiating down commission rates, negotiations are shifting toward buyer credits. In many transactions, buyers are asking for closing cost credits or other concessions from the seller. To balance this, some sellers may offer a lower buyer’s agent commission, knowing that agents can still negotiate with their clients for the difference.
Ultimately, what matters for the seller is the total cost of the transaction. Whether they offer a credit or negotiate on the commission, their focus remains on their net profit. This flexibility allows sellers to adapt to the demands of the market while ensuring that they still receive competitive offers for their property.
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Business as Usual with Minor Adjustments
While there have been changes in how commissions are negotiated post-NAR settlement, the structure of deals has largely stayed consistent. Sellers are generally still offering standard commission rates, and agents are finding ways to ensure their compensation through direct negotiation with their buyers if necessary.
The key takeaway is that this has been a period of adaptation rather than disruption. Agents continue to negotiate on behalf of their clients, and while there may be slight adjustments in how compensation is structured, the overall process remains steady and functional.
In this climate, agents are encouraged to:
Stay flexible in their negotiations with both sellers and buyers.
Understand their E&O insurance coverage in case of any disputes related to compensation.
Work closely with their brokers to ensure all parties are aligned on commission structures, as some brokers may have restrictions on accepting certain commission arrangements.
The NAR settlement has introduced some changes to how buyer’s agent commissions are negotiated, but the market remains strong, with sellers still willing to offer fair compensation. The increased transparency and flexibility in negotiations provide an opportunity for agents to continue thriving while ensuring that their clients
get the best deal possible.
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