The Impact of Real Estate Commission Changes on Agents’ Careers

4 minute read

By Ryan Pratt

Real estate commission changes are transforming the industry for both agents and clients. Traditionally, real estate commissions have remained relatively constant, with agents earning a percentage of a property’s sale price. However, recent shifts—driven by evolving market conditions, new technology, and regulatory updates—are disrupting this model. Let’s explore how these real estate commission changes impact agents’ careers and what they can do to stay competitive.

What’s Behind These Real Estate Commission Changes?

Before delving into how these changes might impact the selling process, let’s address the legal actions that have significantly impacted the real estate commission landscape. In October 2023, a federal jury in Missouri ruled that the National Association of Realtors (NAR) and several large brokerages conspired to inflate Realtors’ commissions.

As a result, the brokerages settled out of court, and NAR agreed to a $418 million settlement in March 2024. 1 This legal outcome forced changes to longstanding rules governing how consumers negotiate and pay real estate agents. The case highlights growing concerns over transparency and fair pricing in the industry, signaling a shift in how homebuyers and sellers engage with real estate professionals.

Now, consumers have more power to negotiate commissions, with some opting for flat fees or reduced rates instead of the traditional percentage-based system. 2 New rules also emphasize clearer disclosure of fees, helping buyers and sellers understand exactly what they’re paying for. These changes are driving increased competition among agents and giving rise to alternative models that offer consumers more options. Ultimately, the goal of these reforms is to create a fairer, more transparent real estate market for all parties involved.

Adapting to New Commission Structures

In recent years, more real estate companies and platforms have introduced alternative commission structures. Instead of the traditional percentage-based commission, some companies are offering fixed fees or lower commission rates. This shift is putting pressure on real estate agents to reassess their business models.

For many agents, this means making adjustments to their pricing strategies. While lower commissions can attract clients looking for savings, they also reduce the income potential for agents. To adapt, agents must find new ways to add value to their services, ensuring that clients see the benefit of working with them despite reduced commissions.

Increased Competition Among Agents

As commission structures change, competition among real estate agents is intensifying. Agents who once relied on a steady income from traditional commissions are now competing with companies that offer discounted rates or technology-driven alternatives. This increased competition is forcing agents to rethink how they market themselves and attract clients.

To stay ahead, agents must put greater efforts into standing out from their peers. By investing in marketing and developing strong personal brands, agents are working harder to cultivate their professional image in order to thrive. Building relationships with clients and offering personalized service is also becoming more important than ever.

Technology’s Role in Commission Changes

Technology is one of the main drivers behind real estate commission changes. With the rise of platforms that allow buyers and sellers to connect directly, some people question the need for traditional real estate agents. 3 These platforms often offer lower commission rates or flat fees, further disrupting the industry.

Agents who embrace technology and use it to their advantage are more likely to succeed. Whether it’s through virtual tours, digital marketing, or customer relationship management (CRM) software, tech-savvy agents can streamline their processes and enhance the client experience. Staying current with the latest tools and trends is essential for agents who want to remain competitive.

Legal and Regulatory Impacts

Changes in laws and regulations are also affecting real estate commissions. In some markets, governments are introducing policies aimed at making housing more affordable. These policies may include restrictions on the commissions agents can charge or greater transparency requirements in real estate transactions.

For agents, this means staying informed about legal updates that could impact their earnings. Understanding the legal landscape helps agents navigate changes and adapt their practices to remain compliant. It also gives agents an opportunity to educate clients on how these regulations affect the buying and selling process, further demonstrating their expertise.

Finding New Income Opportunities

As real estate commission changes continue to reshape the industry, agents are exploring new income streams. With their commissions decreasing, many agents are diversifying their services in order to maintain their previous incomes. For example, some agents are offering additional services like property management, home staging, or real estate consulting.

By expanding their skill sets and exploring new niches, agents can create multiple income streams. This approach not only helps offset lower commission rates but also adds value to clients who benefit from a wider range of services. Agents who are adaptable and willing to explore new opportunities are more likely to build resilient careers.

Learn More About Real Estate Commission Changes

Real estate commission changes are having a significant impact on agents’ careers, requiring them to adapt in order to remain successful. As commission structures shift and competition increases, agents must find new ways to provide value to their clients.

By embracing technology, staying informed about legal changes, and diversifying their services, real estate agents can navigate these challenges and continue to build thriving careers. The key to success lies in adaptability and a commitment to providing exceptional service in an evolving industry.

Ryan Pratt

Contributor