Real Estate Commissions

Brokerages face the pressure to adapt as new rules put pressure on commissions.

Kieran Ryan
August 15, 2024

In partnership with

Good morning, Nerders. It’s Thursday, August 15th. In today’s newsletter, we cover:

What’s happened to real estate commissions since the monumental settlement
How much do parents plan to cover for their children’s college education
Mars’ $36B deal for Pringles maker Kellanova

TODAY’S STORY

The standard 6% commission sellers typically pay in home purchase transactions (3% to buyer’s agent + 3% to listing agent) is about to go away.

The new rules, which will go into effect this week, will allow buyers and sellers to negotiate a market rate. This new dynamic is already putting downward pressure on agent commissions.

A recent report from Redfin shows that in the 50 most populous metro areas in the U.S., the average buyer agent commission fell to 2.55% in July, down from 2.62% at the beginning of the year.

Experts predict the new rules will force commissions to tick down even more.

While this is good news for homeowners, as they might save some money on the margins, it’s really bad news for realtors. One study found that 79% of brokerages would be unprofitable if agent commissions dropped to 2%.

It’s been a tough few years for real estate professionals following the housing boom during COVID-19 when interest rates were at all-time lows. The new commission structure could add to the challenges.

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DATA BYTES

Among American parents saving for their children’s college education, 95% expect to cover more than half of the cost for their children
2 in 10 adults in America (led by 40% of Gen Z) are saving for college, either for themselves or a family member
On average, those saving for college expect the total cost to be $77,300 and aim to pay it off by the age of 45

#SHORTS

Mars’ $36B deal for Pringles maker Kellanova

@boringbusinesskieran
Mars' $36B deal for Pringles maker Kellanova // Make sure to follow me to keep up with the latest business stories and trends #business

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To read the web version of previous stories, click here

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Thanks for reading,
Kieran & Justin Ryan