Residential Real Estate News
86 Percent of Industry Believes NAR-DOJ Commission Lawsuits to Trigger Mass Agent Exodus from the Industry
According to new research by Clever Real Estate, around 86% of agents believe the recent changes to the commission structure, which took effect last month after the DOJ's national class action lawsuit against the National Association of Realtors (NAR), will drive many agents out of the industry.
The settlement's most significant change is that sellers are no longer required to cover the buyer's agent's commission, shifting the burden to buyers to decide how to compensate their own agent.
Nearly half of the agents surveyed (48%) expressed a more pessimistic view of their career prospects since the settlement was reached, while only 16% felt more optimistic. Furthermore, nearly two-thirds of agents (64%) remain opposed to the commission structure changes, though this is down slightly from 70% earlier in the year. The term "confused" was the most commonly used word by agents to describe their reaction to the settlement.
A significant 72% of agents predict the changes will have a negative impact on the industry overall, while only 20% foresee a positive outcome. Although this sentiment has slightly improved, 76% of agents--down by 12 points since April--still believe the changes will hurt first-time home buyers. Meanwhile, 53% of general buyers surveyed support the settlement.
Additionally, two-thirds of agents (66%) believe buyers will be less likely to use an agent, but only 22% of homeowners and prospective buyers share that view.
Interestingly, 67% of homeowners back the changes, though only 26% claim to have a strong understanding of the lawsuit and its settlement. The majority of homeowners (79%) and buyers (71%) believe agents should be required to disclose their commission rates upfront. Over half of homeowners (57%) and buyers (59%) also support government regulation of commission rates.
Among homeowners planning to sell within the next year, 63% are now more inclined to do so, given the reduced obligation to pay the buyer's agent's commission.
In light of these major industry changes, 83% of agents plan to explore new business strategies, with 35% stating they'll avoid working with sellers who do not offer concessions to help buyers cover agent fees.
