It's been a few weeks since the National Association of Realtors rolled out
The settlement caused some division among mortgage professionals over whether the new requirements would
Consumers and agents are still adjusting to the new rules. Fee negotiations have increased in some areas, whereas others have not seen any notable shifts, Redfin said.
Negotiation over commissions has become more common in some markets, and at higher price points, the real estate brokerage reported.
"We've found a tale of two markets," said Redfin Chief Economist Daryl Fairweather. "In slow markets where there's less demand from homebuyers, like Austin, agents report that most sellers are still willing to pay the buyer's agent commission to attract buyers, and agent fees are mostly the same as before."
On the other hand, in cities like San Francisco and Boston that have low inventory and robust demand, local agents report more instances of fee negotiations, where the sellers are asking buyers to make their best offer rather than preemptively deciding what they want to offer to their representative.
"Now, like the amount of earnest money deposit or including an inspection contingency, the amount the buyer is asking the seller to pay her agent is a term that impacts the strength of the offer," Fairweather said. "That will likely drive fees down over time."
The typical buyer's agent commission was 2.55% in July, down slightly from before the settlement made news, according to a Redfin analysis.
The new rules also state that listing agents must tell prospective buyers what they charge before touring a home, which is intended to make fees more transparent.
Buyers are now
Many real estate brokers are taking a further step by requiring home seekers to sign a full buyer agency agreement in order to tour, Redfin said, obligating them to work exclusively with that agent for a certain time.
The biggest change thus far, Redfin said, has been buyers and sellers negotiating over who pays the buyer's agent, and how much. More sellers have realized commissions are negotiable and they may be able to get the buyer to cover all or some of the buy side commission.
The consensus from agents, according to Redfin, is that how much a party can negotiate depends on the demand for the listing.
"It's all price-specific and seller-specific," said Las Vegas Redfin Premier agent Fernanda Kriese in the report. "Sellers understand that agents aren't going to work for free, but they're thinking about what percentage they're going to offer the buyer's agent:
It can range from 2% to 3%, depending on how desirable the listing is.
"Ultimately, the commission goes together with the price," Kriese said. "Sellers may have to list slightly higher if they're offering to pay a higher commission to the buyer's agent, and vice versa."
Negotiation is especially common in the luxury market, Redfin said, and real estate brokers are noting more downward pressure on buyer's agent commissions for those high-end listings.
However, even though negotiations are becoming more common, Redfin found most sellers are still willing to help cover the buyer's agent fees, alleviating a concern of mortgage underwriters about whether a potential borrower would still qualify if it came out of their pockets.
Before the settlement, sellers proactively advertised a commission on an MLS that they would be willing to pay any agent who represented the buyer, and it was often accepted.
Now sellers are taking more time to evaluate their options and decide on a strategy based on the housing market and demand for their home. Most are still willing to cover the buyer agent fee as long as they leave with their desired amount.
"With sellers, I'm laying everything out upfront, presenting the options for payment to the buyer's agent," said Gregory Eubanks, a Los Angeles Redfin Premier agent in the report. "One, don't offer a buyer's agent commission at all. Two, state that you're open to paying buyside commission but don't provide an exact number. Three, go ahead and put a number out there–it can't be advertised over the MLS, but listing agents can communicate it to buyer's agents in different ways."
Removing the offer of compensation from the MLS has also led to more back and forth between agents when scheduling a showing, with more buyers' representatives contacting the listing counterpart to ask if the seller is open to offering compensation.
Some listing brokers are communicating what the seller is willing to pay buyer's agents in creative ways, according to Redfin agents. In Dallas and Portland, Redfin said its agents have seen instances of "3%" written on a lockbox. But most agents report mostly communicating about fees via phone calls and texts.
