Commission cuts stall as sellers stick to old ways

Homeowners are reverting back to old habits in the real estate market.

After giving them smaller commissions in 2024, sellers are paying buyer's agents 2.77% commissions this year, according to brokerage Clever Real Estate. Those buyer agents saw their commissions dwindle to 2.30% last year, as the industry adjusted to a major rule change.

The National Association of Realtors last August freed sellers of their long-held obligation to pay the buyer's agent, ushering in an era of negotiating in the home buying process. That new practice was the result of the trade group's massive loss in a consumer class action lawsuit, an event that reverberated across the industry's largest brokerages. 

Industry experts anticipated widespread shifts in the housing finance landscape, but the status quo has seemingly held. The 2025 commission for buyer's agents is a few ticks up from the 2.70% fee they received in 2023, according to Clever. 

"Although sellers are no longer required to pay the buyer's agent fee as part of the NAR lawsuit changes, many sellers' agents still recommend offering it as a concession," the brokerage's report read. 

How commissions have shifted in recent years

Altogether, buyer's and seller's agents are collecting a combined 5.44% in commissions this year, up 12 basis points from last year. Seller's agents are receiving on average 2.77% of the transaction price. The total real estate commission has steadily decreased since 2021, when it was 5.50%. 

The industry altered its century-old commissions practices late last year, after a jury awarded home sellers in a case against NAR and leading real estate players $1.78 billion in damages. After briefly considering appealing the decision, major companies decided to settle with consumers, agreeing to open up commissions negotiations.

A 109-page settlement, among other changes, banned buyer-brokers from listing their services as "free", and prohibited offers of compensation being made on Multiple Listing Services. 

While analysts predicted impacts to affordability and industry relationships, concerns have largely failed to materialize. Numerous reports in the months following NAR's new rules have found commissions on a steady, but slow downward trajectory. While more parties are haggling, around a third of the industry said they've seen no change to commissions negotiations, according to Redfin. 

Where buyers and sellers are paying the most, and least commissions

Nationwide, average total commissions range from 4.92% to 6.03%, according to Clever. The fees increased in 39 states in the past year, although the brokerage reported most of those increases were minimal. Brokers are also charging lower fees in high-priced regions, as higher values offset their potential losses.

Consumers pay on average $44,282 to real estate agents in Hawaii-based transactions, the highest dollar amount for brokers in any state, Clever found. However, Michigan accounts for the highest average commissions at a combined 6.03%.

Meanwhile, agents in the traditionally pricier New Jersey are collecting the smallest combined commission rates at 4.92%. On a dollar basis, West Virginia real estate agents are earning just $9,048 between buyer and seller representatives. Some lower commissions could be the result of dual agency, where agents represent both sides of a home sale, Clever said.