What Does the Death of the 6% Real Estate Commission Mean?

Dan Nicholson

Average brokerage fees could fall by between $6,000 and $12,000 — good news for buyers and sellers, bad news for realtors.The National Association of Realtors (NAR) announced a landmark settlement marking the end of the traditional 6% commission structure. This seismic shift in the real estate commission model could pave the way for a new era of buying and selling homes in the United States. Though the news could push existing realtors out of the market, it also opens doors to a more competitive and consumer-friendly market landscape. 

The End of The 6% Commission

For decades, the 6% commission fee has been a standard in the U.S. real estate industry, often split between the buyer's and seller's agents. This model has been critiqued for inflating the cost of buying and selling homes, potentially limiting market competition and innovation. 

The NAR’s recent settlement with a group of homeowners, who were suing the organization for infringing on antitrust laws, includes paying $418 million in damages. They have also agreed to a significant restructuring of their rules governing commission fees and broker agreements with buyers and sellers, reported CNN.

This change could dramatically lower the costs associated with buying and selling properties, making homeownership more accessible to a broader segment of Americans. The removal of fixed commission rates introduces a more dynamic pricing model, where fees are negotiable and more closely reflect the level of service provided by real estate agents.

Implications for the Housing Market

The adjustment in commission structures is expected to have far-reaching effects on the housing market. First and foremost, the potential decrease in transaction costs could invigorate the market, making it easier for buyers to afford homes and for sellers to list their properties without the burden of hefty commission fees. This is good news for sellers in a market that is currently inhibited by high mortgage rates.

The U.S. housing market has seen ups and downs so far this year, with a 9.5% spike in sales in February followed by a moderate decline. High mortgage rates have put pressure on buyers and sellers alike, reaching 6.8% earlier this year. Sam Khater, chief economist for Freddie Mac, commented to the Associated Press, “In this environment, there is a good possibility that rates will stay higher for a longer period of time.” 

However, the change in realtor regulations may give the housing market a boost by encouraging innovative business models and services within the real estate industry. Discount brokerages, flat-fee services, and tech-driven real estate platforms may gain traction, offering consumers more choices and potentially better service. This could also lead to a more efficient market, with properties moving more quickly and less friction in the negotiation process.

Challenges and Opportunities for Realtors

The elimination of the standard commission fee poses both challenges and opportunities for real estate professionals. On one hand, the increased competition could pressure agents to differentiate themselves through superior service, specialization, or competitive pricing. This environment might favor top-performing agents, who can leverage their reputation and expertise to command a premium for their services.

At the same time, the industry might see a contraction in the number of realtors, as the competitive pressure and lower average commission rates make it challenging for less experienced or less efficient agents to sustain their businesses. This could lead to a professionalization of the industry, where only the most skilled, knowledgeable, and customer-oriented realtors thrive.

On the other hand, a reduction in the number of realtors could mean less competition and less availability of resources for those selling properties. Real estate firm Zillow announced, “If agent commissions are meaningfully impacted, it could reduce the marketing budgets of real estate partners or reduce the number of real estate partners participating in the industry, which could adversely affect our financial condition and results of operations.” 

Navigating the New Real Estate Landscape

For consumers, the settlement promises a more transparent and competitive market, where they can shop around for the best service at the most reasonable price. Buyers and sellers are encouraged to negotiate commission rates and discuss the range of services offered by agents to find the best fit for their needs.

Realtors, meanwhile, must adapt to the new market dynamics. Emphasizing personalized service, leveraging technology, and adopting flexible pricing models can help agents stand out. Building a strong online presence, offering virtual tours, and utilizing social media for marketing can also attract clients in a digital-first world.


As the real estate market adjusts to these significant changes, stakeholders across the board must stay informed and agile. The end of the 6% commission era could herald a more competitive, efficient, and consumer-friendly market, benefiting buyers, sellers, and dedicated real estate professionals alike.





Associated Press

New Jersey Real Estate Report

Dan Nicholson is the author of “Rigging the Game: How to Achieve Financial Certainty, Navigate Risk and Make Money on Your Own Terms,” deemed a best-seller by USA Today and The Wall Street Journal. In addition to founding the award-winning accounting and financial consulting firm Nth Degree CPAs, Dan has created and run multiple small businesses, including Certainty U and the Certified Certainty Advisor program.

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