The landscape of real estate commissions in the U.S. has undergone significant shifts in 2025, particularly following a landmark settlement that has led to changes in how commissions are structured in residential property transactions. In March 2024, the National Association of Realtors (NAR) reached a historic $418 million settlement with the Department of Justice over antitrust concerns. The settlement fundamentally altered commission arrangements in the real estate industry, making waves for both buyers and sellers. The outcome has far-reaching consequences for real estate agents, consumers, and the overall market.
Traditionally, in most residential real estate deals, the seller paid both the listing agent’s and the buyer’s agent’s commissions, typically totaling around 5-6% of the sale price. The new rules—put into place starting in August 2024—stipulate that sellers will no longer be required to pay the buyer’s agent’s commission. Instead, the buyer will be expected to compensate their agent directly.
This change is expected to reduce overall selling costs for sellers, as they will no longer be responsible for paying the buyer’s agent. As a result, some experts believe it could lead to a more transparent and market-driven commission system, where the buyer’s agent is compensated directly, reflecting the value they bring to the transaction. But not all market players are in favor of these changes. Some agents have expressed concern about losing a portion of their commission, which traditionally incentivized them to bring in buyers. To address these concerns, many real estate professionals are adjusting to new compensation strategies, and some sellers are still voluntarily offering commissions to buyer agents in a bid to encourage greater interest in their properties.
The Consumer Federation of America (CFA) has weighed in on these changes, encouraging buyers and sellers to engage in more transparency and discussions around agent compensation. Experts advise that buyers and sellers take the time to understand the new structure and how it can impact their final costs. The potential for a shift in market dynamics also means that buyers now have greater leverage to negotiate the terms of their agent’s compensation.
As a result of these changes, the average real estate commission has decreased slightly, from 5.64% in 2024 to approximately 4.96% in 2025, according to recent reports by Redfin and the National Association of Realtors. While commissions are lower, the debate continues over whether the changes will lead to more affordable housing and better outcomes for consumers, especially given the increasing cost of housing in many parts of the U.S.
In light of this shift, it is critical for both real estate professionals and consumers to understand the evolving landscape. Transparency in commission negotiations is expected to become a growing theme as the year progresses, and both buyers and sellers are advised to be more proactive in determining how commissions are handled.
