A major legal settlement involving the National Association of Realtors (NAR) was expected to reduce agent commissions, but homeowners across the country report that little has changed. The long-standing practice of sellers paying a commission of 5% to 6%, split between the buyer's and seller's agents, largely continues despite new rules designed to increase negotiation and transparency.
Data shows that commission rates have remained stable, and new buyer-broker agreements, a key outcome of the settlement, are now reinforcing the traditional fee structure. This leaves many home sellers questioning the practical impact of the industry-wide rule changes.
Key Takeaways
- Despite a major NAR settlement, real estate agent commissions have not significantly decreased.
- The national average buyer's agent commission was 2.43% in the second quarter of 2025, nearly unchanged from before the new rules.
- New mandatory buyer-broker agreements often pressure sellers into covering the buyer's agent fees.
- State laws, including in California, have been enacted to legally require these buyer-broker agreements.
- Most real estate agents continue to adhere to a standard commission rate of 2.5% for representing buyers.
The Settlement's Limited Impact on Sellers
Home sellers who entered the market after the settlement anticipated potential savings on commission fees. However, the reality on the ground has proven different. Eric Itakura, who listed his Mountain View condo last year, experienced this firsthand. He received two offers, and both buyers requested that he cover their agent's commission, one asking for 2.5% and the other for 3%.
While Itakura had the right to refuse, doing so risked the buyers withdrawing their offers. "There’s a convention that’s been in place for a long time," Itakura explained. "The more you try to buck against that standard, the more potential problems you create for yourself." He ultimately accepted an offer that included paying a 3% commission to the buyer's agent because he felt it was the most secure path to selling his property.
Commission Rates Remain Firm
According to data from Redfin, the nationwide average commission for a buyer's agent in the second quarter of 2025 was 2.43%. This figure is almost identical to the average from the previous year, before the settlement's rule changes took effect. On a median-priced home in the Bay Area at $1.3 million, this amounts to approximately $31,600 paid to the buyer's agent.
How New Rules Reinforce Old Practices
The settlement stemmed from a 2019 lawsuit in Missouri where home sellers argued that NAR's rules artificially inflated commission fees. Previously, sellers were required to advertise the commission they would pay the buyer's agent on the Multiple Listing Service (MLS), the primary database for properties for sale. This practice effectively standardized the rates.
Following a jury verdict against them, NAR agreed to "decouple" the commissions. The core change was the introduction of a new requirement: buyers must now sign a formal representation agreement with their agent before making an offer. This contract explicitly states the agent's fee and clarifies that the buyer is responsible for paying it if the seller declines.
The Buyer-Broker Agreement Dilemma
While intended to promote negotiation, these agreements have had an unintended effect. Because most homebuyers do not have the liquid cash to pay a 2.5% or 3% agent fee out-of-pocket on top of a down payment and closing costs, the responsibility shifts back to the seller. Sellers who refuse to pay the buyer's agent fee risk the deal falling through, as the buyer would be legally obligated to pay a commission they likely cannot afford.
Stephen Brobeck, a senior fellow at the Consumer Policy Center, noted the pressure this creates. "These contracts put sellers under great pressure to accept the agent’s normal rates, almost always either 2.5% or 3.0%," he said.
Government and Industry Responses
The new system has drawn scrutiny from federal regulators. In a court filing, the U.S. Department of Justice voiced concerns that the buyer-broker agreement rule "may harm buyers and limit how brokers compete for clients."
In contrast, the National Association of Realtors defends the practice. In a statement, the organization said, "Written buyer agreements are pro-consumer and pro-competition." NAR argues that the contracts improve transparency and clearly define the relationship and negotiated fee between a buyer and their agent.
Real estate industry groups have also moved to solidify this new standard. In California, the California Association of Realtors (CAR) successfully sponsored a bill in 2024 that mandates these buyer-broker agreements. The bill received bipartisan support and passed with little opposition.
"Sellers understand that it’s to their benefit to pay the compensation. Especially since prices are so high, buyers don’t want to come up with extra money. It’s hard enough to buy a home in Silicon Valley." - Janelle Boyenga, Los Altos-based agent
The standard agreement form drafted by CAR even includes an option for agents to check a box that states, "Buyer does not have sufficient funds to pay broker." This sends a direct message to sellers that refusing to cover the commission could kill the deal.
The Enduring 2.5% Standard
Despite the legal framework allowing for negotiation, the industry standard for buyer's agent commissions has proven resilient. Interviews with numerous agents in the Bay Area confirmed that 2.5% remains the typical fee, with only some discount or flat-fee brokerages offering lower rates.
Many agents are unwilling to reduce their fees, viewing it as a reflection of their professional value. "I don’t typically go lower than 2.5%, because that’s my value," said Ricky Flores, an agent with Sotheby’s in Menlo Park. "I work hard, and what I bring to buyers is worth more than dropping my commission down."
Some agents also reported that their brokerages, which typically take a 15% to 40% share of an agent's commission, discourage them from accepting lower fees. When asked about their policies, a spokesperson for Compass stated, "Compass believes that all commissions are negotiable and not set by law." Other major brokerages either declined to comment or did not respond.
Limited Scenarios for Negotiation
While the status quo largely prevails, there are exceptions. In highly competitive markets, sellers may have more leverage to reject a buyer's request to cover agent fees. Additionally, some wealthy buyers may choose to pay their agent's commission directly to make their offer more appealing.
However, for most transactions, the commission is not a primary point of negotiation. Sellers tend to focus on the net proceeds from the sale, factoring in commissions as a standard cost of business. For Eric Itakura, the decision was practical. "We didn’t want to fight for something on principle," he said. "The bigger picture was getting the condo sold."
