The Impact of NAR Commission Rule Changes: An In-depth Analysis

Introduction Hi, my name is Kevin Retcher, owner of First Meridian Mortgage. Recently, the National Association of Realtors (NAR) introduced new commission rules, and I wanted to examine how these changes have affected the commission environment over the last 30 days. To provide a thorough analysis, I collaborated with a local title company to gather statistics on open contracts and utilized advanced tools for data analysis. Get the Report

Breaking Down the Data

To begin with, the transactions were divided into three categories based on their purchase price: – **$200,000 to $450,000:** This category saw 11 transactions. The average listing commission was 2.26%, and the selling side averaged 2.45%. The average purchase price in this range was around $340,000, which likely included many condos. – **$450,000 to $766,000:** In this mid-range category, there were 15 transactions. The average listing commission was slightly higher at 2.45%, while the selling side was comparable at 2.47%. The average purchase price here was approximately $627,000. – **$766,000

Higher Price Range Analysis –

**$766,000 and Above:** This highest category included 14 transactions. The average listing commission held steady at 2.45%, consistent with the mid-range category. Interestingly, the average selling commission decreased to 2.32%. Notable outliers in this category included one listing done for a flat $500 fee and a transaction where the selling agent left the commission off the contract due to the absence of a signed buyer agreement, performing the transaction for free. ### Observations and Additional Insights A few additional observations from the data: – Out of the 40 transactions sampled, only one client chose to go through the transaction without a buyer’s agent, which was lower than anticipated. This aligns with traditional patterns, but it will be interesting to monitor if this trend changes over the next 90 days. – On the listing side, there was a mix of commission rates: – One transaction at 1.75% – 17 transactions- 14 transactions at 2.5% – 8 transactions at 3% – On the selling side: – 9 transactions at 2% – 2 transactions at 2.25% – 25 transactions at 2.5% – 3 transactions at 3% Interestingly, higher-priced transactions (average purchase price around $950,000) saw lower commission percentages. This trend suggests that as the loan size increases, the commission rates as a percentage tend to decrease.

Future Implications Looking ahead, it’s crucial to continue monitoring these trends

While the last 30 days have provided essential insights, the real impact of the NAR commission rule changes might only become apparent over a more extended period. We will keep an eye on how these patterns evolve over the next 90 days.

Conclusion These early observations indicate that despite the new NAR commission rules, the overall landscape remains relatively stable.

The vast majority of transactions still involve both a listing agent and a buyer’s agent, and commission rates, for the most part, have held steady or slightly increased depending on the price category. If you need further insights or assistance, feel free to contact me. My name is Kevin Retcher, owner of First Meridian Mortgage. I’m dedicated to exceptional service, and I have never missed a closing date on a purchase. As a veteran-owned business, I extend my gratitude to all veterans and particularly to my fellow Marines—Semper Fi! If you’re in need of a reliable mortgage broker in Northern Virginia, don’t hesitate to reach out at 703-799-5626. I look forward to speaking with you soon.

 

You can find the report at https://firstmeridianmortgage.com/Housingreport.pdf