Real estate agents in 32963 and across Indian River County who represent buyers are doing just about as well as they ever have, despite a shake-up in regulations last year that seemed to threaten their livelihood.
A May 16 report from online real estate behemoth Redfin found that buyers agents’ income has stayed stable nationwide since the changes went into effect, and Vero realtors say the same is true here.
“In our market, sellers see the need to be competitive, and almost all the sellers continue to offer compensation for buyers agents,” says Douglas Elliman broker associate Sally Daley. “I have only had a couple of occasions where buyers have had to fill the gap.”
Prior to the settlement, sellers almost always paid the commissions for both their own agent and the buyer’s agent – typically 5 to 6 percent in total – and that information was published on the multiple listing service for each property.
But a jury in Missouri decided this practice unfairly inflated agent commissions.
The thought was that sellers were being coerced into paying not only their agent but the agent representing the buyer out of fear that buyers agents otherwise would not bring clients to their property.
Two main changes were forced by the lawsuit: The National Association of Realtors agreed that no offers of compensation for buyers agents would appear on the MLS, and agents would have to sign a buyer/broker agreement with buyers they represent that specified the source and size of their commission before showing buyers a house or houses.
When the changes went live in August 2024, gloomy media chatter predicted plummeting commissions and a mass exodus of agents from the real estate business.
Alarmists speculated that real estate commissions would be cut in half, since sellers were no longer “required” to offer buyers agents 2.5 or 3 percent of the selling price as a commission when a property changed hands.
But that didn’t happen.
Buyers agents are still allowed to ask listing agents if the seller is offering compensation. If the seller isn’t, it naturally puts them at a disadvantage with buyers and their agents.
The agent probably isn’t going to use their time and expertise to show their client a house or condo without knowing they will be paid for their professional services. If the seller isn’t willing, the buyer ends up getting stuck with the additional expense of paying their agent, which essentially makes the tight-fisted seller’s house more expensive and less appealing.
“Sellers know they need to be competitive in a slow market with rising inventory,” says Daley. “If you reduce the number of people you can sell to, and end up with fewer showings, that may cost more than paying the commission.
“When you offer compensation to the buyers agent in the listing agreement, your net will generally be higher and you will have fewer days on the market,” she adds. “My clients have no qualms about paying.”
Dale Sorensen Sr., founder and broker of the islands largest homegrown real estate brokerage, agrees.
“Real estate commissions have always been negotiable, even before the settlement. That was missed somehow in the lawsuit, but it has been the case forever, and the services provided by the buyers agent and brokerage are significant.
“Buyers want the agent’s opinions and advice. They want the agent’s counsel and expertise [in a high-dollar, complex business transaction that will have a major impact on their future lifestyle.
“And sellers want to get the house sold. I just signed a listing modification last week where the seller added a $15,000 sales bonus for their agent,” on top of paying commissions for both sides of the deal.
Because of market dynamics, including the desire for professional assistance in ever more complex real estate transactions, Sorensen says there has been only “a slight erosion in revenue from the buyers side,” at his 200-agent, billion-dollar brokerage.
Nationwide, the average buyers agent commission was 2.40 percent for homes sold in the first quarter,” according to the Redfin report. “That’s up slightly from 2.37 percent in the fourth quarter of 2024 and 2.36 percent in the third quarter of 2024 – when the new National Association of Realtors commissions rules went into effect – but down slightly from 2.43 percent in the first quarter of 2024.
“When the data is broken down by price tier, varying trends emerge. Buyers agents are earning a slightly smaller commission percentage for luxury homes than before the NAR settlement, and a slightly bigger percentage for more affordable homes.
“The report is based on an analysis of Redfin’s data on buyers agent commissions for closed home sales, using national, aggregated sales data from Redfin agents’ listings, deals referred by Redfin.com to partner agents, and deals where buyers used Redfin-owned Bay Equity Home Loans,” according to the company.
Under the new regulations, a standard Exclusive Buyer Brokerage Agreement spells out the dollar amount or percentage of the sale price the buyers broker will receive.
“The agreement can be for one day, a week, a month, or multiple months,” Sorensen said.
If the agreement is to look at one specific property, the negotiation is simplified because the buyer and their agent will know how much compensation the seller is offering and can write up their agreement with that knowledge in mind.
If the agreement is more expansive, covering a period of time in which the buyer and agent will look at multiple houses, there is a clause that specifies what the agent will receive for their services and notes that the buyer will be responsible for paying the dollar amount or percentage if the seller does not.
If a desirable house is discovered where the seller is not offering compensation for the buyers agent, most buyers will presumably factor the commission expense into the offer they decide to make.
If they have $500,000 to spend and they know they will have to pay their agent $15,000 at closing, they may well reduce their offer by that amount.
“Sellers care about what they are going to get at the closing table,” Sorensen said, so they have generally continued to factor the buyers agent commission into their costs in hopes of a better offer and quicker sale.
“Honestly, most of my clients haven’t really paid that much attention to the changes and most of them don’t have a detailed understanding of what the changes are,” Daley says. “What is important is that there is a strong level of trust between me and them.”
“A good real estate agent doesn’t think about commission dollars exclusively. They think more about helping their seller sell their property or the buyer find the property that is right for them,” says Sorensen, who founded his company in the 1970s. “Because of the amount of the years that we’ve been here and because of the quality and success of our agents over the years, there is a certain reliance on us by our clients.”
Just because island brokers are successfully navigating the new system imposed by the National Association of Realtors after the settlement last year doesn’t mean they like the changes.
“I spend more of my time doing paperwork now than ever before,” says Sorensen. “The buyers side agreements have to be reviewed and signed by the broker to be valid.
“We have contract coordinators in each of our offices to help with the process who are very good, but I still end up seeing most of the paper. It all takes time and adds to our costs, which makes it a double whammy. You have a small reduction in income along an increase in business expenses!”
