A landmark legal settlement involving the National Association of Realtors was expected to reduce real estate agent commissions, but recent data shows fees have remained largely unchanged. Home sellers across the country are still paying buyer's agent fees at rates similar to those before the new rules took effect.
Despite changes designed to increase negotiation and transparency, the long-standing industry practice of sellers covering a 5% to 6% total commission, split between both agents, persists. This has left many sellers questioning the real-world impact of the settlement.
Key Takeaways
- A major settlement with the National Association of Realtors has not led to a significant decrease in agent commission rates.
- The national average buyer's agent commission was 2.43% in the second quarter of 2025, nearly identical to the previous year.
- New rules require buyers to sign contracts detailing their agent's fee, which sellers often feel pressured to pay to complete a sale.
- Industry experts and consumer advocates argue that these contracts maintain high commission rates, while real estate groups claim they improve transparency.
The Settlement's Unfulfilled Promise
A significant legal challenge to the real estate industry concluded with a settlement that rewrote the rules on agent commissions. For decades, it was standard for home sellers to pay a commission of 5% to 6%, which was then divided between their agent and the buyer's agent.
The lawsuit, initiated by a group of Missouri home sellers in 2019, argued that this system artificially inflated fees. The resulting settlement was intended to "decouple" these commissions, theoretically forcing buyers and their agents to negotiate fees independently and fostering a more competitive market.
However, market data indicates that little has changed in practice. According to a report from Redfin, the average commission for a buyer's agent nationwide stood at 2.43% in the second quarter of 2025. This figure is almost unchanged from the period before the new regulations were implemented.
Commissions by the Numbers
In the Bay Area, where the median home price is approximately $1.3 million, a 2.43% buyer's agent commission translates to about $31,600. This cost is typically paid by the seller as part of the transaction's closing costs.
New Rules, Old Practices
The core of the new system is a requirement for buyers to sign a formal agreement with their real estate agent before making an offer. This document, known as a buyer-broker representation agreement, explicitly states the agent's commission and clarifies that the buyer is responsible for paying it if the seller declines to do so.
While intended to increase transparency, these agreements have created a new dynamic that pressures sellers. Many home buyers cannot afford to pay their agent's commission out-of-pocket on top of a down payment and closing costs. Consequently, sellers who refuse to cover the fee risk the entire deal collapsing.
Eric Itakura, who recently sold his condo in Mountain View, experienced this firsthand. He received two offers, and both included a request for him to pay the buyer's agent commission—one for 2.5% and the other for 3%.
"There’s a convention that’s been in place for a long time," Itakura said. "The more you try to buck against that standard, the more potential problems you create for yourself."
Ultimately, Itakura accepted the offer that included a 3% fee because he believed that buyer was more likely to finalize the purchase. His experience reflects a common sentiment among sellers who prioritize closing a deal over challenging established commission norms.
The Impact of Buyer-Broker Agreements
Consumer advocates argue that these mandatory contracts have become a tool for maintaining high commission rates. Stephen Brobeck, a senior fellow at the Consumer Policy Center, explained that the agreements place sellers in a difficult position.
"These contracts put sellers under great pressure to accept the agent’s normal rates, almost always either 2.5% or 3.0%," Brobeck stated. He noted that the cooperative nature of the real estate industry makes it easier to preserve existing fee structures.
Government Scrutiny
The U.S. Department of Justice has also expressed reservations about the new system. In a legal filing related to the case, the DOJ warned that the mandatory buyer-broker agreement rule "may harm buyers and limit how brokers compete for clients."
In response, the National Association of Realtors maintains that the agreements are beneficial. In a public statement, the association said, "Written buyer agreements are pro-consumer and pro-competition," arguing they clearly define the agent-client relationship and encourage fee negotiation.
Several states have moved to codify this practice. In 2024, California passed legislation, sponsored by the California Association of Realtors (CAR), that mandates buyers sign these agreements. The bill received bipartisan support and passed with little opposition.
Industry Defends Commission Structure
Real estate agents and brokerages contend that their fees are justified and have always been negotiable. Janelle Boyenga, an agent based in Los Altos, said that sellers often see the value in covering the buyer's agent fee.
"Sellers understand that it’s to their benefit to pay the compensation," Boyenga explained. "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."
The standard agreement form provided by CAR even includes an option for agents to indicate that the "Buyer does not have sufficient funds to pay broker," sending a clear signal to the seller about the potential consequences of not paying the commission.
While agents say fees are negotiable, many are reluctant to lower their rates. Ricky Flores, an agent with Sotheby’s in Menlo Park, expressed a common sentiment: "I don’t typically go lower than 2.5%, because that’s my value. I work hard, and what I bring to buyers is worth more than dropping my commission down."
Brokerage Influence
Brokerages, which typically receive between 15% and 40% of an agent's commission, also have a vested interest in maintaining higher rates. While major firms like Compass state that commissions are negotiable, some agents report internal pressure to stick to the industry standard of 2.5% or higher.
Market Realities for Buyers and Sellers
For most home sellers, the primary goal is to complete the transaction smoothly. Negotiations tend to focus more on the final sale price, inspection contingencies, and closing dates rather than agent commissions.
A Berkeley-based agent, Daniel Stea, summarized the seller's choice: "You’re free to tell them no. But if you tell them no, that could change their offer, because then suddenly they’re going to have to find a way to pay their agent."
There are some exceptions to this trend. In highly competitive markets, sellers with more leverage may successfully refuse to pay the buyer's agent fee. Additionally, wealthy buyers sometimes offer to pay their own agent's commission to make their bid more appealing.
However, for the majority of transactions, the long-standing commission structure remains intact. For sellers like Itakura, the practical need to sell their property outweighs the principle of fighting over fees.
"We didn’t want to fight for something on principle," he concluded. "The bigger picture was getting the condo sold."
