Agents are not as enthused about making less money on a sale
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New nationwide research shows sellers who cut buyer-agent commissions risk slower or failed sales.
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Properties offering lower commissions were 51% less likely to sell and took a third longer on the market.
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A recent $418 million NAR settlement gives buyers new leverage to negotiate agent compensation.
A new study offers the first nationwide evidence that real estate agents steer buyers away from homes with lower commissions. Analyzing 265,000 listings across 30 U.S. markets between June 2021 and February 2022, researchers found homes with the lowest buyer-agent commissions were 51% less likely to sell and lingered 33% longer on the market compared with homes offering higher payouts.
The research from the University of Texas at Austins McCombs School of Businesshelps explain why U.S. real estate commissions average 5% to 6% of a homes sale pricewell above countries like the U.K., where fees are closer to 1.5% to 2%. Sellers are highly incentivized to go ahead and offer very high compensation to buyer agents, said finance professor John Hatfield, who co-authored the study. The data also showed homes with lower commissions drew fewer online views, signaling reduced buyer interest from the start.
Lower commissions, slower sales
Both anecdotes and localized studies have previously pointed to the existence of steering. But Hatfields study presents the first systematic, nationwide evidence.
Researchers analyzed 265,000 listings in 30 markets across the country. Dated from June 2021 to February 2022, the listings included commissions offered to buyers agents.
For each market, the researchers calculated the going commission rate. They then broke properties into four groups, depending on how they compared with the going rates. In Austin, for example, the going rate was 3% for buyers agents, while the lowest group was below 2%.
They found that the lower the commission, the harder it was to sell the house:
- Houses with the lowest commissions were 51% less likely to sell at all than those with commissions at the going rate.
- Nationwide, houses in the lowest group got 8% fewer page views on the real estate brokerage website Redfin than those in the highest group, with those in between getting 4% fewer views. Fewer views indicate less interest among buyers.
- The lowest group took 33% longer to sell than the highest group, while in-between houses took 15% to 17% longer.
Thats strong evidence of steering, theUniversity of Texas'John Hatfieldsays. A seller offering a lower commission rate to buyer agents should be prepared to see fewer potential buyers.
Buyers may gain leverage under settlement
The findings come as the National Association of Realtors in 2024 agreed to a $418 million settlement in an antitrust case that reshaped how buyer agents can be compensated. Under the new framework, buyers can negotiate directly with their agents about pay, potentially pushing costs down. Hatfield says buyers should consider written contracts specifying how much their agent earnsand even arrange rebates if sellers offer above-market commissions. Think of it like negotiating when youre buying a car, he said.
Posted: 2025-08-29 14:44:32
