Real estate agents predict what fallout from NAR settlement will be

Real estate salespeople have softened their views on the impact of the National Association of Realtors settlement on broker commission payments in the weeks since it went into effect.

But the prevailing sentiment remains that, as a group, they hate the changes and 86% of them believe it will push people out of the business, a Clever Real Estate survey taken between Aug. 28 and Sept. 9 found.

The industry survey of 516 active agents was partially concurrent with a poll of 1,000 current homeowners and potential buyers on Aug. 28 and 29. The settlement changes were effective on Aug. 17.

Even the sentiment about the exodus of real estate professionals was an improvement over the results from an April survey when 95% responded that the settlement, announced in March, would force people out.

Not everyone sees that as a bad thing.

"This will allow seasoned professionals, especially those who offer flexible commissions, the opportunity to thrive in their local markets and serve their communities better than ever before," Lisa Ragland, an agent from Wilmington, North Carolina, said, adding the inexperienced and/or part-time salespeople are likely the ones most affected from the changes to the business model.

A separate study from Flatworld Mortgage Solutions looking at search interest for "realtor jobs" found a large decline in the last two years from the pandemic real estate boom years of 2021 and 2022.

It used Google Trends measurements, where 0 represents no interest and 100 is peak popularity.

For 2024, the average interest was 63.78, the lowest since 2016, when it was 60.08. But in 2021, the average interest score was 82.83 and the next year 83.06.

"The peak years 2021-2022 could be related to changes in the housing market during and after the COVID-19 pandemic," an online posting with the study said. "This data suggests that while there have been fluctuations, interest in realtor jobs has experienced a potential cooling off recently."

While some states had severe real estate job losses between 2022 and 2023, led by California, down by 8,160, a handful of others posted gains, including Nevada at 1,140.

"This analysis reveals a challenging period for real estate agent employment across the United States, with some states managing to grow despite the overall negative trend," the Flatworld study said. "The reasons for these disparities could be related to local economic conditions, housing market dynamics, or regulatory changes, and might warrant further investigation."

In the Clever RE survey, the share of agents that opposed the settlement fell to 64% from 70% in April, while 76% expect it would cause problems for first-time home buyers, down from 88%.

"First-time buyers are worried that they will be pushed to the side when more financially secure buyers can afford to pay brokerage fees out of pocket," said Carl Heitman, an agent from Worcester, Massachusetts.

Almost half of the respondents, 48%, said they were more pessimistic about their real estate careers since the settlement was approved. No change was the answer for 36%, while 16% felt more optimistic.

On the consumer side, 64% supported the change in commission structure, versus 36% who opposed. But the prospective purchaser portion of the survey had a less positive view, and split almost evenly, at 53%-to-47% in favor.

But 55% of the consumers surveyed admitted they had limited knowledge about or even didn't understand the settlement at all. For those future homebuyers, that number jumped to 59%.

Having to pay the buyer's broker commission could have an impact on real estate sales, the consumer survey found.

Just shy of two-thirds of the buyer respondent cohort would change their strategy if they had to pay their real estate commission rather than it being done by the seller when the sale closed, as had been the past practice.

When surveyed buyers were told the typical commission on a median-priced home was roughly $12,000, 63% claimed it would make them less likely to make a purchase.

Among the solutions offered was for the commission to be rolled up into the mortgage. At one depository lender, The Federal Savings Bank, it is offering a non-secured loan to help buyers cover the cost.

But some worry that it could be a deal breaker at a time when pending home sales are already at the lowest point on record.

"Most buyers that I have come across barely have enough for the down payment and closing cost and can't afford to pay their agent and don't want the extra expense wrapped up into their mortgage," said Tracy Trammel, an agent in the Washington area.

Still, 83% of the agents surveyed plan to adopt new tactics as a result, with the most popular being entering into short-term agreements (either a single showing or for a short period of time) with buyers. That was named by 43% of the respondents, followed by 42% declaring they would provide more detailed cost breakdowns and 40% adjusting their commission structure (respondents could choose more than one answer).