Real Estate Agent Commissions Barely Budged After “Landmark” Court Case
Real estate commissions don't appear to be dropping after a landmark verdict that was supposed to cut costs of selling a home.
Remember all the fuss about real estate agent commissions back in the summer of 2024? The National Association of Realtors® (NAR) had reached a court settlement in March that was supposed to slash the cost of selling a home when it was implemented in July.
In March 2024, soon after the settlement was announced, The New York Times reported: “Housing experts said the deal, and the expected savings for homeowners, could trigger one of the most significant jolts in the U.S. housing market in 100 years. ‘This will blow up the market and would force a new business model,’ said Norm Miller, a professor emeritus of real estate at the University of San Diego.”
So, what happened next? In many cases, next to nothing.
Realtors® vs. real estate agents
You have to pass NAR exams, sign up to a code of conduct, and pay annual dues to call yourself a Realtor®. That’s why that registered trademark is so widely used. It stops real estate agents who haven’t done those things — and have met only state licensing requirements — from calling themselves realtors.
“There are 1,554,604 Realtors (members of the National Association of Realtors) in the United States among an estimated 2,000,000 real estate agents (licensed, but not members of the National Association of Realtors),” according to Ruby Home Luxury Real Estate.
So, while the court settlement was reached by the NAR, the numerical strength of the organization always meant its terms would apply across the entire real estate landscape.
Why Some Believe Change Was Needed
In March 2024, the Urban Institute, a 50-year-old nonprofit research organization, said, “For decades, Americans have paid some of the highest real estate agent commissions in the world, amounting to roughly $100 billion annually.
Real Estate Commissions in the U.S. vs U.K
A U.S. real estate transaction typically costs 5-6% in real estate commissions. In the U.K., commissions total around 0.9-3.6% according to finance site Unbiased.
“Traditionally, sellers and their agents agree on a commission fee, typically 5 to 6 percent of the home value, with that amount paid out of the seller’s proceeds and split between the seller’s agent and the buyer’s agent.”
Contrast that with, say, the United Kingdom. Buying agents are rare there, and would-be purchasers check listings and talk directly to all the sellers’ agents in the area where they plan to live. In the UK, “Fees tend to be between 0.9% and 3.6% and can be affected by how many agents are [listing the home] and how well you’ve negotiated,” says UK financial website Unbiased.
Few American sellers were even aware that they could negotiate the real estate agent commissions in the contracts they signed, Urban Institute reports.
How Much Are Real Estate Agents Making?
The Federal Reserve Bank of St. Louis estimates the median sales price nationwide of homes sold in the first quarter of 2025 was $416,900. At 5% commissions, that would deliver $20,845 to agents — or over $25,000 at 6%.
Under the old system, the sellers’ agent would collect the money and share it equally with the buyer’s agent. Yet, in March 2025, the NAR claimed, “On average, real estate agents make about $50,000 annually, with luxury agents earning an average of $119,000 per year.”
With an agent receiving $10,000 -$12,000 for each average transaction, that would mean non-luxury agents are selling only four or five homes a year.
A 2023 report by the Consumer Federation of America put it bluntly: “For years, many researchers and industry members have suggested that there are too many licensed real estate agents selling residential properties.”
Why Change Stalled
The idea behind the settlement was to detach buyers’ agents’ fees from those of sellers’ agents. The seller would sign a contract with his or her agent for, say, 2%-3% of the sale price. Buyers would pay their own fees.
That was always unlikely. Most buyers, especially first-time buyers, simply don’t have a spare $10,000-$12,000 lying around. And even those who do would be unlikely to pay it to a real estate agent for buying services.
The settlement banned sellers’ agents from including an offer to share commission with a buyer’s agent on the multiple listing service (MLS). And buyers’ agents often refused to show listed homes to their clients without either the buyer agreeing to remunerate them or the seller’s agent offering to share commissions.
Commission Changes Seem Area-Dependent
Chicago: Commissions Up
Jose Hernandez is a realtor in Chicago. “What I am seeing out there is that commissions increased because of the settlement. In the past, our average commission rate was 5%, and now we are at 6%,” he says.
What I am seeing out there is that commissions increased because of the settlement. In the past, our average commission rate was 5%, and now we are at 6%
“I think it's psychological,” Hernandez continued. “Sellers feel they are saving money when you tell them they are paying 3% for listing their home instead of 6%. And, if an offer comes in contingent on the seller paying a 3% buyer's agent commission, the sellers are still OK with it. During the traditional days, if I told a seller it's a 6% commission, they would push back. I mean, even buyers are okay paying 3% commission. I recently was involved in a transaction where the seller paid the listing agent 4% commission plus my 3% buyer's agent commission.”
Nashville, Tenn.: Commissions Up
Dylan Calvo, who is part of his father’s brokerage The Calvo Team, is having a similar experience. “Right now, in Nashville, Tennessee, it is a buyer's market,” he says. In a market where the seller has less power, the seller is still paying the buyer’s agent commission. “The sellers are really competing to get their homes sold, and they are aware that the buyer's agent needs to get his or her commission. So, things have not really changed for our team since August. We come to an agreement with our buyer clients, and they agree on a 3% compensation because they know we are able to get the sellers to pay that. We have had only a couple of our buyers pay it earlier on.
“When things change to a sellers’ market, we may have to ask the buyer to cover our compensation more and maybe even reduce our commissions,” Calvo continues. “Which is interesting to think about because some people may not have the money after paying closing costs and all that.”
Colorado Springs, Colo.: No Change
Meanwhile, Andrew Fortune is finding much the same story in Colorado Springs, Colo., where he owns and operates Great Colorado Homes.
“Commissions have not been affected by the NAR settlement in my local market. I noticed commissions drop slightly during and after COVID because homes were selling so fast that sellers could save some money, and no one challenged it. Now that homes are staying on the market much longer, we're seeing the same commission percentages that we've always seen.”
Los Angeles, Calif.: It’s Complicated
Finally, Wesley Kang is founder of Realtor 1099Cafe, writes about his experiences in Los Angeles, where he is a real estate agent. While sellers can find cheaper options, it doesn’t end up paying off. “Honestly, the whole commission drama makes me laugh (despite what my broker keeps preaching),” he says. “These commission ‘cuts’ are hitting different than anyone expected and the commission psychology has flipped the whole game upside down.
“Smart sellers think they'll save big, but end up paying more when their homes sit unsold or their cut-rate agents ghost them mid deal. Last week, my full-service listing sold for $80k over market while my neighbor's discount broker couldn't even handle basic negotiations!”
Real Estate Agent Commissions Nationwide
How the NAR settlement affects you as a home buyer or seller will largely depend on your housing market. As Dylan Calvo suggested, sellers in buyers’ markets are often still swallowing real estate agent commissions for both buyers’ and sellers’ agents. But that might change if the balance of power shifts back to sellers.
For now, the difference the NAR settlement has made across the country seems tiny. At the end of March, 2025, The New York Times reported, “ … one year on, average commissions have dipped by a small amount, with one study showing a reduction, on average, from 5.64 percent to 4.96 percent in the months following the settlement. Other studies show they haven’t budged at all.”
With Americans paying “some of the highest real estate agent commissions in the world,” there must be a need to make buying and selling a home more affordable. However, it seems that the NAR settlement may not be the tool to make that happen.
