Real Estate Commissions in 2024: New Rules, Risks, and Opportunities

1. The NAR/Sitzer-Burnett Verdict: What Happened and Why It Matters

In October 2023, a Missouri federal jury delivered a landmark $1.8 billion verdict against the National Association of Realtors (NAR) and several large brokerages in the Sitzer-Burnett class action. Home sellers from Missouri argued that NAR’s rules, enforced through local Multiple Listing Service (MLS) systems, required sellers to offer blanket payments to buyer-brokers, which inflated costs. Defendants included NAR, Keller Williams, and HomeServices of America. The case, filed in 2019, went to trial in 2023; damages could triple on appeal to more than $5 billion.

Jurors found that NAR’s “Participation Rule” violated Section 1 of the Sherman Act by restraining trade. This set a powerful antitrust precedent: industry-wide rules, not just single-company actions, can trigger massive damages when they limit consumer choice.

Brokerages quickly began revising policies. Within a month of the verdict, 41% reported they were actively reviewing commission structures. FTC Chair Lina Khan called the ruling “a wake-up call for the industry.” Several regional MLSs dropped mandatory compensation fields almost immediately.

2. Breaking Down the Traditional 6% Commission Model

The 6% commission rate dates back to the 1950s, when NAR forms standardized a single commission covering both listing and buying sides. While there has been some regional variation, this percentage has remained common for decades.

A seller’s listing agreement typically promises a total fee—historically 6%—split between the listing broker and the buyer-broker, who is paid through the MLS offer of compensation rather than by the buyer directly. Each brokerage keeps a share before paying its agent.

Consumer advocates have criticized the system for its lack of transparency and for “steering,” where agents favor listings offering higher payouts. Studies show this practice can distort pricing and limit competition, which led to recent antitrust actions.

Source: Statista; NAR; LeadingRE Compensation Trends 2024

3. New Rules and Fee Structures Emerging in 2024

MLS policies now remove or make optional the offer-of-compensation field, forcing buyers and agents to negotiate fees directly. Early data show a rise in written buyer-broker agreements and a wider range of commission rates.

Brokerages are experimenting with flat-fee, hourly, and à-la-carte pricing. Redfin, for example, advertises buyer representation for as little as $2,500, regardless of price. Eighteen percent of firms now offer at least one alternative to percentage pricing.

Exclusive buyer-broker contracts are becoming more common, outlining duties and payment. Listing agreements now clarify that offers to buyer agents are optional. These changes aim to reduce steering and improve fee transparency.

4. What Home Buyers Need to Know Now

Sellers may still cover the buyer-broker fee as an incentive, but it is no longer assumed. In Denver, buyers have paid flat $5,000 fees; in Atlanta, buyers have negotiated 1.5% commissions paid at closing.

Tips for buyers:

• Ask each agent to explain pricing and included services.
• Insist on a written buyer-broker agreement.
• Compare at least three agents before signing.
• Confirm whether the seller offers any buyer-broker payment.
• Match the fee to transaction complexity and agent experience.
• Guard against “double-dipping” (dual agency).

Checklist for comparing agent services and fees:

• Is the compensation method clearly stated?
• Are specific services listed?
• Is a written agreement provided?
• Are extra costs disclosed?
• Is there a plan if the seller offers partial or no payment?
• Are recent buyer references available?

Real buyer experiences: Maria from Phoenix signed a buyer-broker agreement before touring homes. Because of the new rules, her agent offered a flat fee to fit her condo budget. James, a Minneapolis first-time buyer, said his lender flagged the direct-pay change in time for him to budget another 1.5%.

5. What Home Sellers Should Watch For

Listing agreements now highlight whether the seller will offer buyer-broker pay and stress that every term is negotiable. Some forms warn that refusing compensation could reduce showings.

On a $500,000 sale, a seller might pay 2.5% to the listing agent ($12,500) and decide whether to offer, for example, 1.5% ($7,500) to buyers’ agents—or nothing. Homes with no buyer-broker offer stayed on the market 12% longer in early 2024.

Sellers can choose between:

• Traditional brokers: full service, 2-3% listing fee.
• Discount brokers: limited service, smaller percent or flat fee.
• Flat-fee MLS: pay once, handle most tasks yourself.

Real-estate attorney Lisa Tran warns that lower fees are not always better value if marketing or negotiation suffers.

6. The Competitive Landscape: Winners, Losers, and What’s Next

Large franchises like Keller Williams and RE/MAX have overhauled training and contracts. Independents are rolling out à-la-carte and digital-first options. Broker-owner Mark Ellis says nimble firms can tailor services to what sellers actually want, though compliance costs may lead to more consolidation.

DOJ and FTC officials are signaling more scrutiny, and several states are drafting disclosure bills. Legal analyst Rachel Kim predicts more lawsuits targeting MLSs that lag on reform.

Average total commissions dropped to 5.1% in Q1 2024 from 5.7% in 2022. Analysts expect sub-5% averages by year-end, with buyer-broker compensation becoming rare outside luxury or complex deals.

The Rise of Flat-Fee Real-Estate Brokerages: What Sellers Need to Know

Introduction
Thinking about selling your home in 2024? You’re not alone if you want to cut real-estate costs. Nearly 10% of U.S. sellers now use alternatives like flat-fee brokerages, according to the National Association of Realtors. This share has doubled in five years. Legal reforms and tech-savvy consumers are changing the industry, so understanding flat-fee models can help you keep more of your equity. This guide covers how these brokerages work, what they cost, and the key questions to ask so you can make the smartest choice when listing your home.

1. What Is a Flat-Fee Real-Estate Brokerage?

A flat-fee brokerage charges a set dollar amount to list and help sell your home instead of taking a percentage of the sale price. Traditional agents collect 5 to 6 percent of the final price, split between listing and buyer’s agents. For a $400,000 sale, that means $20,000 to $24,000 in commissions (NAR). Flat-fee brokerages set a price, often $300 to $5,000, no matter what your home is worth.

Service menus are usually tiered:

• MLS-Only: Your home is listed on the Multiple Listing Service (MLS), but you handle showings, negotiations, and paperwork.
• Basic: Adds essentials like a yard sign, lockbox, and limited agent guidance.
• Premium: Includes professional photography, online marketing, and negotiation support, all for a set fee.

Many companies let you add extras individually, so you control both cost and involvement.

2. Why Flat-Fee Models Are Gaining Popularity in 2024

Flat-fee brokerages are growing because sellers want more control, clearer pricing, and bigger savings. Google Trends searches for “flat-fee MLS” and “low-commission realtor” spiked in late 2023 [Figure 1]. The momentum comes from:

• Legal pressure: The 2023 Sitzer-Burnett verdict found NAR and major brokerages liable for inflating commissions, leading to calls for reform (NAR).
• Regulatory scrutiny: The U.S. Department of Justice is pushing for more fee transparency and competition.
• Consumer savvy: Homeowners now expect upfront cost breakdowns and dislike surprises at closing.

Flat-fee models are thriving because they offer choice, transparency, and the chance to keep thousands more from a home sale.

3. How Flat-Fee Brokerages Work for Home Sellers

The flat-fee process gives you a clear, step-by-step plan and lets you decide how involved you want to be.

1. Schedule a consultation to discuss your goals and review service tiers.
2. Choose an MLS-only, basic, or premium package.
3. Sign a listing agreement that locks in the flat fee and any optional add-ons.
4. Prepare your home; some packages include professional photography or staging.
5. The brokerage lists your property on the MLS and shares it on sites like Zillow and Realtor.com.
6. Coordinate showings and review offers. Depending on your package, the brokerage may help with negotiations.
7. Close escrow, with optional help for paperwork and timelines.

Typical inclusions:
• MLS listing
• Yard sign and lockbox
• Basic online marketing
• Standard forms and disclosures
• Limited agent support (email or phone)

Common add-ons (extra fee):
• Professional photography or 3D tours
• Contract review or negotiation help
• Open-house hosting
• Targeted social-media ads

4. Comparing Costs: Flat-Fee vs. Traditional Commission

Looking at real numbers shows where flat fees can save you money—or where you might be surprised by extra costs.

Scenario	Traditional Commission (5%)	Flat-Fee Brokerage (MLS+Basic)	Flat-Fee Brokerage (Premium)
$350,000 Home	$17,500	$3,000–$5,000	$6,000–$8,000
$750,000 Home	$37,500	$3,000–$5,000	$8,000–$10,000

Example A: On a $350,000 sale, switching from a 5 percent commission to a $3,500 flat fee can save about $14,000.
Example B: On a $750,000 property, even a premium flat-fee package around $9,000 still saves about $28,500.

Hidden costs to watch for:
• Buyer’s-agent commission (often 2 to 3 percent and still common)
• Add-on service charges (photography, negotiation help)
• Cancellation or early-termination fees

High-priced homes see the biggest dollar savings, but remember to factor in buyer’s-agent pay and optional upgrades before you sign.

5. Pros and Cons of Choosing a Flat-Fee Brokerage

Flat-fee brokerages offer major savings but shift more responsibility onto you, so it’s important to know the trade-offs.

Pros	Cons
Significant cost savings	Limited hands-on support
Transparent, predictable pricing	More DIY effort for showings and paperwork
Flexibility to choose services	Add-on marketing can increase costs
Faster listing setup	Not all firms offer negotiation help
Control over your schedule	Some lack deep local expertise

Best for: Experienced, hands-on sellers who want maximum profit and feel comfortable managing showings, minor marketing tasks, and basic paperwork.

6. How to Choose the Right Flat-Fee Brokerage

Choosing the right provider can make or break your sale, so vet each candidate carefully.

Key questions to ask:
• What’s included in the base flat fee?
• Are extra charges required for photos, open houses, or contract review?
• How long will the MLS listing stay active?
• Will I have a dedicated agent or a rotating team?
• How are buyer inquiries and showings handled?
• What’s your track record in my ZIP code?
• Are there cancellation penalties?
• How and when will I receive listing updates?

Red flags:

1. Vague or missing service descriptions
2. Upfront payment before any service starts
3. No recent sales in your local market
4. Poor online reviews or unresolved complaints
5. High-pressure upselling into pricey add-ons

Tip: Compare at least three local flat-fee brokerages using online reviews, state licensing records, and recent sales data (for example, NAR’s Find a Realtor®).

7. Real-World Results: Seller Experiences with Flat-Fee Brokerages

Real seller stories show both the savings and the extra work that flat fees can bring.

Case Study 1: Austin Condo
Maria paid a $1,200 flat fee for MLS access, professional photos, and basic contract support. She hosted showings and handled negotiations herself. The condo sold in 12 days for $410,000, saving about $9,000 compared to a 3 percent listing commission. The trade-off was the time spent answering buyer questions and the extra cost of a real-estate attorney for closing.

Case Study 2: Chicago Suburb Single-Family
The Johnsons chose a $2,000 package that covered MLS, a yard sign, and a lockbox but did not include marketing or negotiation help. After six weeks and several price drops, they accepted a lower-than-expected offer. They still saved on commission but believe stronger marketing might have led to a higher sale price.

Flat-fee brokerages can cut costs dramatically, but limited support means more seller effort and, in some cases, a lower net price.

8. What’s Next for Real-Estate Fees?

Expect more flexible pricing and tech-driven options over the next three to five years.

Predictions:
• More brokerages will offer customizable, à-la-carte pricing.
• Automation will make listings, showings, and paperwork easier.
• Traditional commission rates will likely keep dropping as competition increases.

Action checklist:
• Research local flat-fee and hybrid models before listing.
• Request a written breakdown of every fee and included service.
• Stay informed on legal changes affecting commissions.
• Agents: Offer tiered pricing to stay competitive.