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Stephen Brobeck, Senior Fellow, Consumer Policy Center, responding to Cara Ameer’s 12/3/25 critique in Inman of the recent CPC report on post-settlement changes impacting home buyers

I agree with much of what Cara Ameer said about the challenges facing agents in her response to our report on “the homebuyer experience.”  How little most agents earn has to be one of the most formidable and frustrating causes of these challenges.

• Apparently about half of agents with major firms sell no or only one property a year,[1] and even active agents surveyed by NAR sold a median of only 10 properties in 2024, earning less than $60,000 before expenses.[2]
• A significant portion of the commissions that agents charge is paid to brokers or referral agencies including portals.[3] A buyer agent selling a home with a 2.5% commission may earn, before expenses, less than 1%.
• An important reason for low agent incomes is their difficulty finding clients in a marketplace saturated with part-time agents hoping to “win the lottery” by double-ending million-dollar homes or just to supplement other income.[4]

To add to agent frustrations, for the past several years agents have had to listen to relentless public criticism, then pay a financial penalty (through intermediaries) and restructure how they do business.   It is understandable why many in the industry are now thinking, why can’t critics now leave us alone?

Unfortunately, as our report illustrated, the conditions that led to the public criticism, DOJ antitrust scrutiny, and class action lawsuits still largely prevail.  As our report revealed:

• Buyer agents don’t negotiate commissions with buyers; to the extent these agents negotiate rates at all, they do so with sellers.
• Commission rates, especially in local areas, remain highly uniform despite significant differences in buyer agent experience, competence, reputation, effort, and costs including referral fees.

As long as these two conditions persist, the industry will continue to face criticism and legal interventions.  But fortunately, the settlement and new industry rules have opened a door that allows incremental progress toward a marketplace that is not only freer from criticism and litigation, but also fairer both to agents and to consumers.

To achieve this result, and it would take time, the industry must accept two changes:

• Widespread acknowledgement that, consistent with the view of nearly all experts, buyer agent commissions (BACs) are currently baked into sales prices.[5]
• More obvious and easier opportunities for buyers to explicitly finance these commissions. This could be done through buyer-seller agreements to add BACs to sale prices, but it would be far preferable for mortgage lenders to directly offer this option.   Regardless, disclosures and contracts must clearly state the separation of BACS from sale prices and listing agent commissions.

These two changes would not radically transform the marketplace.  Rather, over time they would likely increase the interest of sellers in offering lower sale prices when buyers finance BACs, increase the interest of buyers in negotiating and financing the commissions, increase the interest of mortgage lenders in offering BAC financing, and help persuade federal agencies to make this easier.

A concomitant decline in the threat of steering would give both consumers and agents more freedom to negotiate services and agent compensation.  Average commission rates would likely decline but successful full-time agents would be able to charge higher rates than marginally-competent part-timers and new licensees.  The latter would have less incentive to maintain their licenses in overcrowded agent markets, lowering acquisition costs for everyone else.

This future marketplace would never be highly price competitive.  Most sellers and buyers would continue to prioritize selling or securing an affordable property in a timely way.  Some agents would refuse to negotiate their compensation, which is their right.

Yet a large number wouldn’t, providing opportunities for companies and brokers to offer more diverse services and agent compensation.  Consequently, the industry would be far less vulnerable to criticism and litigation.  There would also be more opportunities to increase the professionalism of the industry to which early industry leaders aspired.

[1] https://consumerfed.org/wp-content/uploads/2024/01/Real-Estate-Report-Part3-Final.pdf (pages 1-3)

[2] https://www.nar.realtor/infographics/2025-nar-member-profile-fast-facts

[3] https://www.lirealtor.com/docs/default-source/default-document-library/research-and-industry-reports/2024-NAR-Member-Profile.pdf  (pages 32-33)

[4] https://consumerfed.org/wp-content/uploads/2023/07/Real-Estate-Agent-Report-7-10-23-1.pdf

[5] https://consumerfed.org/wp-content/uploads/2024/04/Commission-Uncouping-Report-April-2.pdf  (notes 20 and 21)