There is a large gap between how the American public feels about the business practice changes outlined in the National Association of Realtors’ nationwide commission lawsuit settlement agreement and how real estate professionals feel about them.
According to a survey published by Clever Real Estate, 67% of the general public supports the changes, while 70% of real estate agents oppose them.
Clever conducted the survey in the latter half of April 2024. It polled 1,000 consumers and 331 practicing real estate professionals who are part of the Clever Real Estate network.
While roughly two-thirds of the general public supports the changes outlined in the settlement agreement, only 36% of respondents said they were aware of the agreement. But 70% of agents have reportedly fielded questions from current clients about the NAR settlement and its impact on commissions.
In addition to supporting the changes outlined in the settlement, 61% of consumers surveyed said that they agree with the primary argument of the commission lawsuits — that the practice of home sellers covering the buyer’s agent commission is unfair and anti-competitive. In contrast, 89% of agents surveyed believe the lawsuits’ allegations lack validity.
Also highlighting the discrepancy between agents and consumers is that 71% of agents surveyed anticipate negative repercussions due to NAR’s settlement, while only 40% of consumers feel the same. Additionally, 58% of agents believe the changes will have a negative impact on their business, while only 15% believe it will have a positive impact.
Of the agents who believe the settlement will have a negative impact on business, 88% say it will discourage first-time buyers from entering the market, 82% say the changes will hurt buyers, and 42% believe the changes will also negatively impact sellers.
Similarly, of the consumers who oppose the changes, the most commonly cited reasons for their opposition are perceived increases to the burden on homebuyers (47%), discouragement to first-time buyers (36%) and overall uncertainty in the market (29%).
In contrast, of the consumers who support the changes, 44% believe the changes will ease the financial burden on sellers; 41% believe they will create a more level playing field between buyers and sellers; 32% say the changes will improve trust; 29% say they will give consumers more flexibility in choosing services; and 28% say they incentivize agents to provide higher-quality services. Supporting this belief is the 52% of agents who report that they are considering additional service offerings to stay competitive.
Consumers also had clear feelings on who they believe the settlement benefits, with 48% feeling that sellers are the biggest winners, while 39% believe buyers will benefit the least and 41% saying that agents will benefit the least.
Overall, 91% of Americans surveyed stated that they believe the NAR settlement will have some impact on future homebuyers and sellers. The most commonly cited impacts were lower commission rates (30%) and increased competition (26%). Additionally, 66% of consumers surveyed who identified themselves as first-time buyers said they would not be able to afford a buyer’s agent commission on top of closing costs and a down payment.
In addition to negatively impacts to first-time buyers, 56% of the agents surveyed anticipate the settlement will lead to an uptick in the average number of days a property remains on the market. The majority of agents (54%) also reported that they believe buyer agent commission rates will remain roughly the same, while 75% anticipate listing agent commission rates will remain the same. About one in five agents said they expect buyer agent rates to drop to 1.5% or less.
Agents also strongly believe (95%) that the changes to the commission structure will lead more agents to leave the industry, while 61% said the changes will create more competition among buyers’ agents, and 60% said it will lead to more difficulty in negotiating fees directly with clients.
Although agents and consumers may feel differently about the effects of NAR’s settlement agreement, 78% and 77% of consumers surveyed feel that sellers’ agents and buyers’ agents, respectively, should make at least as much as they currently do in commissions, while 48% stated that they believe all agents should make more then they currently do.
This comes even as 43% of consumers do not think that current commission rates are justified, while 37% reported having a negative experience with an agent.