2025 Real Estate Commission Strategies

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The NAR commission lawsuit settlement, finalized in 2024 with a $418M payout over four years, has significantly altered the real estate landscape, particularly affecting how buyer-agent commissions are handled. This survey note provides a comprehensive overview for real estate agents and brokers, focusing on current commission rates, scripting strategies, and practical adaptations, including insights into Fannie Mae’s policies and builder practices.

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Current Commission Landscape

The fallout from the NAR settlement, effective since August 2024, has led to a noticeable shift in buyer-agent commissions. According to Redfin’s February 2025 report, the average buyer-agent commission stands at 2.37%, a slight increase from 2.36% in Q3 2024 but down from 2.45% before the settlement Redfin Economic Data. Zillow’s January 2025 data corroborates this, reporting a national average of 2.4% Zillow Economic Research. This decline reflects sellers testing lower offers, sometimes as low as 1-2% or zero, pushing buyers to negotiate or cover costs directly.

For example, in Phoenix, a $350K sale offered 2% ($7K) to the buyer’s agent, saving the seller $3,500 compared to the traditional 3%. This trend is backed by HousingWire’s December 2024 survey, where 68% of agents reported tougher commission discussions, with sellers questioning why they should pay for buyer agents and buyers resisting additional costs HousingWire Survey.

New Construction Commission Rates

New construction homes often offer higher commissions to attract buyer agents, with the National Association of Home Builders (NAHB) reporting an average of 2.8% in 2024 NAHB Builder Survey. Notably, builders like KB Homes in San Antonio are offering up to 5% to buyer agents on new homes, as seen in their marketing materials and agent testimonials KB Homes Agent Incentives. This higher rate, compared to the 2.37% resale average, reflects builders’ strategies to close deals faster, with NAHB data showing new-home sales with incentives closing 20% quicker in Q1 2025 NAHB Market Trends.

Fannie Mae’s Role in Rolling Commissions

Fannie Mae’s updated policy, effective for loans delivered on or after June 1, 2024, and clarified in March 2025, allows lender credits for buyer broker commissions to be rolled into the loan, applicable to both new construction and resale homes Fannie Mae Selling Guide. This requires a written buyer-broker agreement, a reasonable and customary commission, and adherence to loan-specific closing cost limits. For instance, for a $300K loan, adding a $3K commission (1% of the loan) increases monthly payments by approximately $15, depending on the rate, making it feasible for buyers without upfront cash.

Agents can confirm eligibility by working with lenders participating in this program, checking Fannie Mae’s guidelines for details on loan types (e.g., conventional, FHA) and credit limits. This approach is becoming more common, with Redfin reporting 12% of buyers paying part of their agent’s fee in Q4 2024, often through such financing Redfin Buyer Trends.

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Rolling Commissions into Resale Home Loans: How to Find Out

To determine if rolling commissions into a loan is possible for a resale home, agents should:

  • Confirm with the buyer’s lender if they participate in Fannie Mae’s lender credit program for buyer broker commissions.
  • Ensure the buyer has a written agreement with the agent, as required by NAR rules.
  • Verify the commission is reasonable and customary for the area, typically aligning with local averages (e.g., 2.37% per Redfin).
  • Check loan-specific limits, as total closing costs, including the commission, must fit within Fannie Mae’s guidelines, which vary by loan type and down payment.

Qualifications include the loan being eligible under Fannie Mae’s standards, the buyer having sufficient credit and income, and the commission not exceeding the lender’s credit cap, often around 3% of the loan amount. Agents can find this information by contacting the lender directly or reviewing Fannie Mae’s Selling Guide online Fannie Mae Selling Guide.

Alternative Strategy: Putting Commission on Top of the Price

Some agents consider increasing the sale price to cover the buyer agent’s commission, assuming the home appraises at the higher value. For example, a $300K home with a 2.5% ($7,500) commission could list at $307,500, with the buyer paying the higher price and the commission covered. However, this strategy is risky:

  • Appraisals must support the higher price, which depends on comparable sales in the area. If the market doesn’t justify $307,500, the appraisal could come in lower, leading to financing gaps where the buyer must cover the difference in cash.
  • Buyers may resist paying more just for the commission, especially in a buyer’s market, potentially killing the deal.
  • Legal and ethical considerations arise if not disclosed properly, risking disputes.

Given these risks, it’s generally less viable than using Fannie Mae’s lender credit approach, which is more standardized and less likely to derail transactions. Agents should discuss this option cautiously, ensuring transparency with all parties.

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Expanded Scripting for Agents

Given the complexity, agents need robust scripts to navigate these changes. From the archives, including the 2024 podcast “New Rules for Buyer Agents” and YouTube’s “Commission Chaos 101” (March 2024), here are detailed scripts:

For Sellers:

  • “Mr. Seller, in today’s market, offering a competitive commission to buyer agents is key to a fast sale at top dollar. Data shows homes offering at least 2% to buyer agents sell 15% faster (NAR, Q1 2025). So, by offering 2-2.5%, you’re attracting more serious buyers and increasing your chances of a quick close. For example, I recently sold a $450K home with a 2.25% offer in 8 days, beating comps by $12K.”
  • Objection Handler: If they say, “Why should I pay the buyer’s agent?” respond, “It’s optional, but think of it as marketing your home to more agents. Homes with lower offers sit longer, costing you time and potential price drops.”

For Buyers:

  • “Ms. Buyer, I understand you’re concerned about my fee of 2.5%. Normally, the seller covers it, but they’re offering only 1.5%. Here’s how we can handle it: Fannie Mae allows us to roll the $3K gap into your loan for a $300K home, increasing your monthly payment by just $15. This means no upfront cash, and we can close the deal. Let me walk you through the numbers.”
  • Objection Handler: If they say, “That’s too much extra,” say, “I’ve saved clients $20K on deals this year through negotiation. This small increase keeps you in your dream home without breaking the bank.”

These scripts, backed by data and examples, help agents build trust and close deals in this new commission world.

Practical Homework for Agents

To adapt, agents should:

  • Daily (5-10 min): Practice scripts with 5 seller calls and 5 buyer chats, focusing on value and financing options.
  • Weekly (15-20 min): List one home with a 2-2.5% buyer-agent offer; pitch one buyer on rolling the fee into their loan via Fannie Mae.
  • Monthly (30 min): Track your commission average and aim to beat 2.37%; review one lender’s Fannie Mae participation.
  • Sign up for Premier Coaching so you can set specific goals, polish your skills and get the support you need to thrive this year! PremierCoaching.com

This homework is simple, free, and time-light, ensuring any agent, regardless of experience, age, or income, can execute it.

Conclusion

The NAR commission lawsuit fallout is a challenge, but with updated scripts, leveraging Fannie Mae’s policies, and learning from builders, agents can thrive. The average buyer-agent commission is 2.37%, with new construction at 2.8% and outliers like KB Homes at 5%. Rolling commissions into loans is viable through Fannie Mae, and agents should check with lenders for details, while avoiding risky price-inflation strategies.

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