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For most of 2024, the atmosphere in the real estate industry was steeped in panic.
Months before the year began, the National Association of Realtors and a major franchisor lost a jury trial over antitrust claims, leaving unanswered questions about what happens next.
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A subsequent settlement between NAR and a major corporation provided some clarity, but it still seemed like the only certainty was uncertainty. One of America’s most important industries, housing, was left in limbo.
Some of the confusion has since faded, but with 2025 just weeks away, Inman reached out to a group of brokers from smaller and mid-sized companies to get a sense of the situation. And those brokers shared something unexpected. While few may be thrilled that the commission lawsuit happened in the first place, at least a few leaders are starting to think positively about the new situation.
To be clear, no one was knocking on the proverbial door to praise the antitrust case. But every broker contacted by Inman mentioned at least some signs of hope. Considering how much frustration existed in the real estate industry in 2024, this is a surprising finding and suggests the industry’s ability to adapt.
Benefits of the new normal
Brokers mentioned several developments in the post-settlement situation that were positive from their perspective. And most fundamentally, consumers are still using agents.
Anne Jones
“There’s still a clear desire and need for really skilled, hands-on brokers, especially in a tough market,” Windermere Abode broker owner Ann Jones told Inman.
Jones said some consumers are attracted to flat-fee models and low-cost models. Her company is based in Tacoma, Wash., and has seen the expansion of Redfin as an example. But Tacoma is also a destination for first-time buyers because it’s more affordable than neighboring Seattle.
Other consumers searching the area’s housing inventory may have lower credit scores or other unique factors that lead to transactions that, in Jones’ words, “require a higher level of expertise.” may be facing. The results showed that the agent model did not fall by the wayside.
Courtney Poulos, founder and CEO of Acme Real Estate, sees a similar situation in her home base of Los Angeles.
“At first, I was worried that people would think we could do without a buyer agent,” she told Inman. “However, most consumers are well aware that they need some guidance and representation regarding this expensive purchase.”
Courtney Poulos
Additionally, Poulos’ company had been using agency agreements before the settlement, but there was no significant pushback when asking buyers to sign agency agreements. And not a single Acme seller has refused to pay compensation to the buyer’s agent.
Asked about the broader state of the market, Poulos said some buyer agents are negotiating higher compensation than they would have earned in a pre-settlement world.
“One positive side effect of this is that agents are not working for free,” she added. “They definitely know what kind of income they can earn from their work.”
Tiffany McQuaid, president and broker at McQuaid & Company, also cited a number of positive developments, calling the changes in recent months “fascinating” and “in some ways refreshing.”
First, experienced sellers in the past may have been prepared to pay a 5 percent or 6 percent commission. But McQuaid’s company, based in Naples, Fla., has a practice in which her agents simply ask sellers if they are willing to offer any compensation, but do not number the offers. are.
Tiffany McQuaid
“It’s a yes or no answer,” McQuaid explained. “But we’re leaving it at that and we’re not looking for a percentage.”
This puts the buyer’s agent’s commission in the hands of the buyer, and means they can include a request for as much money as they want in their offer. It’s a more liberal approach than has typically existed in the past, but McQuaid says it’s been a hit.
“Usually everyone says yes,” she told Inman. “But you can’t negotiate that percentage at this point, so they’re gleefully going for it.”
John V. Russell, broker and co-founder of Mainframe Real Estate, takes a similar approach, saying that agents should ask buyers for compensation instead of rushing to offer compensation from the beginning. He told Mr. Inman that he was entrusting the matter to him. This means that when an offer comes, [sellers] We do not offer commissions. In return, you can give your clients more negotiating power.
John V. Russell
“For the most part, I don’t think we’ve seen much change,” Russell said. “But for the sellers, it feels like they’re making a profit because they’re able to negotiate a little bit more than before.”
Russell also said one silver lining for the commission shake-up in 2024 is that more buyer agents are signing representation agreements with clients. Such agreements are now required by the new NAR regulations. Russell said agents should have used these before the rules were enacted, but that wasn’t always the case.
“There was so much trust in this buyer-side relationship that the entire agency never signed the contract,” he said. “I think that’s a good thing overall because agents have to sign buyer-broker agreements, and I think that’s a good thing.”
data backup broker
Inman Intel research data suggests that these brokers are not alone. For example, a November poll showed that while more and more consumers are attempting to negotiate on agent fees, fewer are actually settling for below-market rates.
Additionally, only 7% of respondents in the November survey said their fees had decreased significantly since NAR’s payment facilitation rules went into effect in August. A further 31% said their fees had decreased slightly.
But, and importantly, 40% of survey respondents said their commissions had not changed, and 7% said their commissions had actually increased. This result is consistent with Poulos’ observations in Los Angeles.
Mauricio Umansky, founder of The Agency, expressed similar sentiments about rising fees when he spoke with Inman in November.
To be clear, not all agents are seeing salary increases in the post-settlement world. Intel’s data suggests that the gap is widening, especially between the most and least skilled agents. However, the fact remains that there is evidence that talented agents earn more in the payments environment.
friction still exists
However, this does not mean that friction does not still exist.
For example, McQuaid said some buyer agents from other companies sometimes call her representatives to ask what a particular seller is offering in commission. But Mr. McQuaid has been particularly reluctant to suggest specific numbers or percentages, which appears to have angered some less experienced agents.
“We have a lot of agents who get furious and call us if the seller doesn’t give them the percentage they’re offering,” McQuaid says. “It has become a big problem.”
McQuaid said some of these agents have suggested they won’t show you a home unless you get a specific number, a practice McQuaid decried.
“It shouldn’t be a question or a statement,” she said.
Nevertheless, brokers who spoke with Inman said they have done a great deal of preparation to prepare for a post-settlement world, but all agents in the industry benefit from such guidance. Not really. As a result, brokers tended to agree that differing levels of professionalism are a lingering point of friction in some markets.
Carl Medford
Another complaint broker mentioned is that in some cases, there is simply more work that needs to be done now. Carl Medford, CEO of Medford Real Estate Team, a team of Keller Williams based in California’s Bay Area, said, for example, the new rules will require him to do more paperwork. He told Inman that the amount had effectively doubled.
“That’s just ridiculous,” he said. “That’s stupid.”
Other complaint brokers who referred to Inman said commission cases were still dragging on. Others also mentioned the fact that many agents have a very low number of transactions per year, and such agents could be weeded out of the industry. This latter point didn’t exactly come up as a complaint—brokers who spoke with Inman unanimously said their agents were skilled enough to weather the change. -But it suggests many industry players are facing new stressors.
Still, Mr. Inman’s conversations with brokers tended to be significantly more positive. Medford, for example, had one or two complaints. But overall, he was hilarious in the way he captured all the conversations Inman had for this story.
For example, the University of Medford has also moved away from having seller’s agents specify specific percentages or numbers to present to buyer’s agents. As a result, the past year of change, disruption, and upheaval is beginning to look like a silver lining.
“In a way,” Medford said. “Listing properties has become much easier for us because we no longer have to have conversations about buyer agents and paying buyer compensation.”
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