B
uying a house just got even more complicated. Mortgage rates have gone up, the supply of homes has decreased, and now real estate agent fees are changing too. The National Association of Realtors (NAR) settled antitrust lawsuits in March 2024, forcing changes to commission structures that took effect in August 2024.

    Under the new rules, sellers only pay their own agent's commission, not both sides as before. Sellers can offer to pay the buyer's agent fee, but this concession cannot be advertised on a multiple listing service (MLS). Buyers must now negotiate their agent's fee and sign a service agreement before touring a home.

    The NAR settlement aimed to add transparency to real estate agent fees, which were previously a mystery to many buyers and sellers. However, some experts believe that reducing commissions might actually lead to higher home prices in the long run. According to an academic study, lower transaction costs can increase the value of housing as a durable asset.

    Real estate agent fees are negotiable, but most people didn't know this before. Now, buyers and sellers can negotiate fees either as a percentage of commission or as a flat fee. The buyer's agent fee is typically paid at closing and cannot be rolled into the home loan principal.

    When working with an agent, it's essential to understand what services they provide and their expected fee or commission. Sellers should ask about the listing agent's fee structure and whether they're willing to apply a portion of the commission to the buyer's agent. Buyers should also negotiate their agent's fee and ensure it's specified in the contract.

    Real estate agent fees vary by market, but prevailing trends can serve as a benchmark. According to a survey, the overall average real estate total commission was 5.32% in September 2024, split between the listing agent (2.74%) and the buyer's agent (2.58%). Commissions may be adjusted based on the home's sale price, with higher-value homes allowing for lower percentage commissions.

    The Department of Veterans Affairs notes two key changes: VA borrowers can now pay buyer's agent fees, and agreements with Realtors acting as a buyer's agent must include specific fee and service details. With commissions easing down from 6% to 5.32%, it remains unclear how far fees will fall over time, with predictions ranging widely.