Redfin: Commissions Up Slightly For Affordable Homes, Down Slightly For Expensive Homes

(Illustration courtesy of Redfin)

The average buyer’s agent commission was 2.37% for homes sold in the fourth quarter, essentially unchanged from the third quarter, when new commission rules went into effect, according to Redfin, Seattle.

Redfin noted commissions are down slightly from 2.45% a year earlier, before the new rules were announced.

On a more granular level, overall commissions declined slightly the month the new rules went into effect. The average buyer’s agent commission in July was 2.38%, then declined to 2.35% in August (the rules went into effect on August 17). But the average monthly commission ended the year at 2.38% in December, exactly where it was before the rules took effect, the report said.

Broadly speaking, agents tend to agree with the data showing commissions have declined only marginally, Redfin reported. Roughly half (48%) of U.S. real estate agents say the average agent commission in their area has remained about the same since the settlement took effect. More than two in five (43%) say commissions have declined, while 4% say they have increased.

Agents also report homebuyers and sellers are negotiating over commissions more; more than half (54%) of agents said their clients are putting more effort into negotiations following the settlement. One-third (34%) said negotiation efforts have remained about the same, and 6% reported less negotiation. “When news of the settlement first came out, some sellers thought they were going to pay nothing to the buyer’s agent,” said Detroit area Redfin Premier agent Desiree Bourgeois. “That’s not happening; sellers are realizing most buyers are requesting the seller pay for their agent as part of the offer. It’s an ongoing conversation, but people are starting to understand and asking more pointed questions.”