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Study finds real estate commission rates remain unchanged after NAR settlement
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Study finds real estate commission rates remain unchanged after NAR settlement

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Despite industry analysts’ predictions that real estate commission rates would decline following the settlement of lawsuits against the National Association of Realtors, a new study finds that commission rates are so far stable.

The rule changes for NAR members, which took effect in August, are the result of a $418 million settlement that the trade group agreed to in March to resolve several class-action lawsuits that challenged NAR’s cooperative pay structure. the industry. The lawsuits, filed by groups of home sellers, claimed that they were forced to pay artificially inflated commissions to agents when selling their homes, primarily due to the fact that a portion of the commissions were intended to compensate the agents representing home buyers.

And while it has been widely reported in the media that the rule changes could save buyers and sellers thousands of dollars in commissions, a study of 625 real estate agency transactions by AccountTECH found that two months after the NAR rule has changed commission rates, these rates show virtually no movement from year to year.

During the first 60 days after the NAR rule changes took effect, the average commission rate charged to home sellers was 2.738%, a slight increase from the rate of 2.724% on the same dates in 2023. Results suggest that, so far, the regulation has not resulted in any significant changes to commission rates for sellers.

For this same period, the average commission rate charged to buyers was 2.486%, a slight decrease from the rate of 2.541% for these same dates in 2023. Although the slight change in the average commission rate charged to buyers does not is not significant, there was a decline in buy-side transactions compared to a year ago. AccountTECH found that there were 17,358 buyer-side transactions among the 625 real estate agencies surveyed in the first 60 days after the NAR rule changes were implemented. This represents a drop of approximately 10% from the 19,274 buy-side transactions recorded during the same period in 2023.

While the year-over-year reduction in buy-side transactions could be attributed to the fallout from the NAR settlement, AccountTECH points out that interest rates, inventory or general economic conditions are just as likely to be a reason of this decline.

Only transactions with a transaction closing date within 60 days of NAR settlement were included in the AccountTECH study. The study focused only on sales transactions, excluding rental commissions or any other type of commission income. Outliers, defined as cases where the commission charged was greater than 5% or less than 0.5%, were also excluded.