When Eric Itakura listed his Mountain View condo last year, he hoped to save some money on commissions.
The rules over how agents’ fees are set had recently been rewritten as part of a landmark settlement reached between the National Association of Realtors and a group of home sellers. For decades, sellers typically paid a fee between 5% or 6%, split between their own broker and the buyer’s. The new rules, industry watchers predicted, might finally chip away at that standard by forcing buyers and their agents to negotiate separately.
But Itakura found that not much had changed. Two buyers made offers, both asking that he cover their agent’s fee. One wanted 2.5%, the other 3%. Itakura knew he could say no — but he also knew the buyers could walk.
“There’s a convention that’s been in place for a long time,” Itakura said. “The more you try to buck against that standard, the more potential problems you create for yourself.”
Across the country, sellers like Itakura are discovering that while the settlement changed the rules on paper, the practice of sellers paying commissions remains the same — and so have the fees. Nationwide, the average buyer’s agent commission in the second quarter of 2025 was 2.43 percent, according to Redfin — almost identical to a year earlier, before the rule change. On a median-priced Bay Area home of $1.3 million, that’s about $31,600 going to the buyer’s agent.
In the past, a buyer didn’t have to sign a contract with their agent — in fact, they may have been oblivious to their agent’s fee, given that the seller typically paid. The practice was enforced by an NAR rule that required a seller to communicate their commission split to the buyer’s agent for any listing uploaded to the NAR-affiliated multiple listing services, or MLS, the private databases where agents can see homes for sale.
Eric Itakura stands at his home in Los Gatos, Calif., on Tuesday, Sept. 16, 2025. (Shae Hammond/Bay Area News Group)
A group of home sellers in Missouri sued the NAR in 2019, arguing that the practice kept fees artificially inflated. A jury sided with them, and in a settlement, the Realtors association agreed to “decouple” the commissions. It instated a new rule requiring buyers to sign a buyer-broker representation agreement before making an offer, stating the agent’s fee and that the buyer will pay if a seller declines.
The contracts have played a role in maintaining the industry’s fees, especially in a slow housing market. Even though a seller can always say no, they may feel that they have to cover a buyer’s agent, because if they don’t, the buyer would be locked into paying the agreed-to fee out-of-pocket — a cost many buyers can’t afford.
“These contracts put sellers under great pressure to accept the agent’s normal rates, almost always either 2.5% or 3.0%,” said Stephen Brobeck, a senior fellow at the Consumer Policy Center in Washington, D.C.
Under the Biden administration, the U.S. Department of Justice expressed concerns about the new requirement. In a filing last year related to the case, the DOJ warned that the rule “may harm buyers and limit how brokers compete for clients.”
The National Association of Realtors says the contracts help define the relationship between a buyer and their agent, add transparency to the transaction and allows a buyer to negotiate their fee. “Written buyer agreements are pro-consumer and pro-competition,” the association wrote in statement.
Realtors have enshrined the practice in law across several states, including California. In 2024, the California Association of Realtors sponsored a bill that requires buyers to sign these agreements. It passed easily, with bipartisan support.
“Sellers understand that it’s to their benefit to pay the compensation,” said Janelle Boyenga, an agent based in Los Altos. “Especially since prices are so high, buyers don’t want to come up with extra money. It’s hard enough to buy a home in Silicon Valley.”
The standard buyer-broker agreement form drafted by the California Association of Realtors even includes a box that agents can check to say “Buyer does not have sufficient funds to pay broker.” The message to the seller is clear: Don’t pay commission, and the buyer may walk.
In a statement, CAR said that “each seller is free to make their own decision whether to contribute towards the buyer’s broker compensation.”
“You’re free to tell them no,” said Berkeley agent Daniel Stea. “But if you tell them no, that could change their offer, because then suddenly they’re going to have to find a way to pay their agent.”
Before they sign, buyers can try to haggle for a lower fee with their agents to bring a more competitive offer to the table. Agents say their fees are negotiable, and always have been.
But the industry is defensive of its fees. In the Bay Area, a dozen agents interviewed said that 2.5% remains the standard fee for buyers’ agents, although a few “discount” and flat-fee brokerages charge less. Some agents say they would rather lose out on a client than lower their price.
“I don’t typically go lower than 2.5%, because that’s my value,” said Ricky Flores, an agent with Sotheby’s in Menlo Park. “I work hard, and what I bring to buyers is worth more than dropping my commission down.”
Some agents interviewed said the brokerages they work for pressure agents to keep fees at 2.5% or higher. Brokerages typically receive 15% to 40% of their agents’ commissions.
This news organization asked several brokerages whether they enforce a 2.5% fee. Coldwell Banker declined to comment. Sotheby’s and Christie’s did not respond. A Compass spokesperson said in a statement, “Compass believes that all commissions are negotiable and not set by law.”
Because most of them work solely on commission, agents also have little incentive to offer discounts. Many work as both listing agents and buyer’s agents and don’t want to see the industry standard lowered.
“It’s a cooperative industry,” said Brobeck. “That makes it a lot easier to maintain the standards of the culture.”
Agents said that they’ve seen some buyers cover their own commission, particularly wealthy ones looking to sweeten their offers. In hot markets where they have more leverage, a seller can also push back against a buyer’s request to cover the compensation. The buyer’s agent, desperate to close a sale, may even tear up their original contract and agree to lower their fee.
But rarely does it come to that, agents say. Most sellers just consider their net earnings after commissions and choose an offer from there. Inspections, closing dates or the offer price come up in negotiations more often than commissions.
Ultimately, that’s how Itakura felt — even though he bristled at the 3% fee, he took that offer because the buyer seemed more likely to close.
“We didn’t want to fight for something on principle,” he said. “The bigger picture was getting the condo sold.”