NAR Settlement One Year Later: Why Commissions Haven't Dropped

The NAR settlement was supposed to reshape real estate commissions. Buyers would negotiate fees directly. Competition would drive prices down. The bundled 5-6% commission would get deconstructed.

None of that happened.

Redfin data shows buyer's agent commissions ticked back up to 2.43% by mid-2025, right around where they were before the settlement. The structural change that was supposed to save buyers thousands of dollars per transaction barely made a dent.

Why Nothing Changed

Sellers quickly learned that cutting buyer's agent commissions scared off agents, which scared off buyers. Homes listed with lower buyer's agent compensation sat longer on market and sold for less. Most sellers went right back to offering 2.5%.

On the buyer side, the new requirement to sign representation agreements before touring homes created more paperwork but didn't change pricing. Most agents continued charging the same percentage. Most buyers didn't negotiate because they didn't know they could, or didn't care enough to try.

The system is designed to resist change. Percentage-based commissions are embedded in MLS structures, lender calculations, and decades of industry practice. A legal settlement didn't undo that overnight.

The Math That Should Make Investors Angry

On a $1M California investment property at 2.5% buyer's agent commission, you're paying $25,000. On your third deal in a year, that's $75,000 in buyer's agent fees. For work that, in most cases, amounts to research, paperwork, and coordination.

This is the exact work that AI and structured processes handle today. Comp analysis, disclosure review, offer generation, timeline management. The things that used to justify a 2.5% fee are now automatable. What still requires a human is judgment, negotiation, and being physically present. Valuable, but not $25,000 valuable.

The Actual Solution

The NAR settlement didn't lower commissions. Flat-fee brokerages did. Pat charges $5,000-$10,000 per transaction regardless of purchase price. On a $1M deal, that's $15,000-$20,000 in savings compared to a traditional buyer's agent. Same representation. Same fiduciary duty. Same outcome.

Over 5 deals in a year, that's $75,000-$100,000 back in your pocket. For an investor buying multiple properties annually, the savings compound fast.

The industry waited for a legal settlement to fix pricing. It didn't work. The fix is a different business model.