The seller’s market appears to be taking its toll on buyer agents. According to a new report out by Redfin, the typical commission paid to brokerages representing homebuyers was 2.63 percent of the home-sale price during the three months ending Nov. 30, 2021—down from 2.69 percent a year earlier and the lowest rate in Redfin’s records dating back to 2017.
Traditionally, the seller covers the cost of commission for both their agent and the buyer’s agent. For the past two decades, the total commission rate has hovered around 5 percent, generally split between the two sides of representatives.
The total commission, however, has shrunk from the ’90s, when 6 percent was standard.
According to Redfin, sellers are offering lower commissions because they’ve become less reliant on the buyer’s agent to bring in buyers in today’s hot market. That, coupled with more scrutiny over commission practices by the Department of Justice, have led to small fees.
“The lawsuits and DOJ investigation are not currently having a major influence on commission rates, but the industry is watching closely to see whether they could result in buyers becoming responsible for paying their own agents,” Redfin Chief Economist Daryl Fairweather said. “If that happens, buyers will likely be much more eager to negotiate commissions.”