After the 2024 NAR settlement removed what the Consumer Policy Center (CPC) describes as a key roadblock to much lower buyer-agent commissions, many expected fees to begin falling.
A new 22-page report from CPC argues that it hasn’t happened.
Instead, the consumer advocacy group says lingering suspicions about lower-fee agents, not market structure, are what continue to keep commission rates elevated.
In its latest analysis, CPC frames today’s commission environment as a behavioral problem. According to the report, buyers and sellers remain hesitant to work with agents who charge less than traditional rates, even when those agents offer similar service models.
The report’s central argument is that consumers often assume lower fees must be tied to lower quality, an assumption CPC senior fellow Mark Nadel says is generally unfounded.
It’s that assumption, argues Nadel, that leads buyers and sellers to overpay by $6,000 on a home priced at $400,000, and at least $12,000 on an $800,000 home.
Why CPC Says Commissions Haven’t Come Down
CPC’s report begins with the claim that removing a major industry constraint in 2024 should have created downward pressure on buyer-agent fees, but that pressure has not materialized.
According to the report, most consumers continue to choose agents charging long-standard commission rates because real estate transactions feel high-risk.
CPC argues that when facing what is often the largest financial decision of a lifetime, many people default to what feels safest, which usually means paying higher fees. The report suggests this risk aversion leads to a set of assumptions that shape commission choices:
- Lower commissions signal lower service quality
- Higher fees reflect greater expertise or effort
- Discounted pricing must involve cutting back on services
CPC’s position is that these beliefs persist even when lower-fee agents provide comparable transaction support, marketing exposure, and negotiation services.
CPC’s Comparison of U.S. Commission Rates to Other Countries
To support its view that U.S. commissions are inflated, CPC points to pricing structures in other developed housing markets.
The report notes that real estate commission rates in the United States are roughly twice as high as those commonly seen in countries such as:
- Great Britain
- The Netherlands
- Australia
CPC uses these international comparisons to argue that percentage-based pricing tied to home values has contributed to higher consumer costs in the U.S. over time. The report presents this gap as evidence that elevated commissions are not an unavoidable feature of real estate transactions, but rather the product of long-standing industry norms in the U.S.
The Price Appreciation Example CPC Uses to Question Percentage Fees
A central numerical example in the report focuses on how commission totals rise alongside home values, even when the work performed remains similar.
CPC illustrates the issue using a typical percentage structure:
- A 3% commission on a $300,000 home equals $9,000
- A 3% commission on the same home after appreciation to $900,000 equals $27,000
- A low-fee 1% commission on the $900,000 sale would equal $9,000
The report argues that while home prices may triple, the tasks involved in listing, marketing, negotiating, and closing a transaction do not increase at the same rate.
(It’s unclear how much CPC would consider a justifiable increase in agent income to keep up with inflation, or to offset the agent’s expenses on their client’s behalf.)
CPC frames this as a disconnect between compensation and service input, suggesting that percentage-based commissions amplify costs during periods of price growth without a corresponding rise in workload.
Why CPC Says Real Estate Commissions Differ From Typical Sales Compensation
CPC’s report also challenges the common comparison between real estate agents and traditional commission-based sales roles.
According to the report, most sales commissions are tied to business models where product pricing reflects employer costs plus a targeted profit margin. When a salesperson increases revenue, they also increase company profit, which CPC says helps justify higher compensation.
The housing market, CPC argues, functions differently. Home prices are not set to recover seller costs or ensure fixed margins. Instead, sellers aim to secure the highest offer available, and each home can only be sold once.
Under this structure, CPC claims that selling a $900,000 home does not generate three times the economic value of selling a $300,000 home, even though commissions often triple.
That claim, though, doesn’t take into account the cost difference between marketing a high-end property and one priced below the median, for multiple reasons, including:
- Luxury homes tend to take 400% longer to sell
- Agents marketing luxury homes invest in professional high-end marketing campaigns to attract a specific demographic
- Staging fees also tend to be significantly higher
Steering as a Continued Barrier to Lower-Fee Models
While the report centers largely on consumer behavior, CPC also acknowledges that industry practices continue to affect competition.
The report states that steering remains an issue, describing it as a tactic historically used to protect what it characterizes as billions of dollars per year in excess fees.
According to CPC, some traditional agents may still direct clients away from properties represented by lower-fee agents.
CPC notes that federal regulators, including the U.S. Department of Justice and the Federal Trade Commission, have long recognized steering concerns. At the same time, the report suggests the impact of steering may be diminishing, even if it hasn’t entirely disappeared.
What CPC Recommends for Buyers and Sellers
The report closes with specific strategies CPC recommends to consumers to reduce commission costs.
For sellers, CPC encourages contract language that allows them to retain any buyer-agent compensation funds that exceed the agent’s agreed-upon fee. The report also advises evaluating offers based on net proceeds after commissions rather than headline sale price.
For buyers, CPC recommends requiring agents to rebate any compensation received above the agreed fee. The report also suggests that buyers should not avoid homes where sellers decline to cover buyer-agent commissions and instead mentally add the fee to the home’s price for fair comparison.
Finally, CPC urges continued use of online listing platforms such as Zillow and Redfin to ensure homes represented by lower-fee agents are not overlooked.
Ultimately, CPC’s analysis rests largely on financial comparisons and international benchmarks, rather than the day-to-day realities of representing clients. CPC approaches commission value through the lens of price efficiency, not through the scope of service, risk management, or client advocacy that many in the industry view as central to the role.
For now, the report adds to a growing body of research attempting to reframe how housing transaction costs are evaluated in a post-settlement market.
Business Play: How to Navigate Compensation Conversations Going Forward
In today’s environment, clear communication around compensation is a core part of the client experience.
To stay ahead of both regulatory change and evolving consumer expectations, continue to:
- Be upfront about how compensation works, including what services are included and how fees are structured from the start of the relationship.
- Walk buyers through the buyer agreement in plain language and ensure it’s reviewed and signed early in the process so expectations are set clearly.
- Offer tiered compensation options where appropriate, outlining different service levels so buyers can choose the structure that best fits their needs and budget.
This approach keeps conversations focused on value, clarity, and consumer choice, even as outside groups continue to debate what agent services should cost.
