This report is available exclusively to subscribers of Inman Intel, the data and research arm of Inman offering deep insights and market intelligence on the business of residential real estate and proptech. Subscribe today.

The mad dash for broker-owners and executives to respond to the array of changes to commissions in recent months has paid off in at least one crucial way: Agents feel their brokerage has their back.

Real estate agents who responded in late March to the Inman Intel Index broadly reported feeling that their brokerage has prepared them for the changes from the commission lawsuits and settlements, and will continue to offer them the resources they need. 

Agents also told Intel they are confident they can articulate their value to clients amid this new landscape, in which buyer-side compensation is increasingly up for negotiation.

These results are notable because they came from a time when the industry was already processing a major new shift in the dynamic of the lawsuits. 

NAR had announced a settlement and a series of sweeping policy changes only days before Intel surveyed more than 1,009 real estate professionals for this story. 

As Intel reported last week, this appears to have contributed to a drop in agent confidence in future buyer pipelines. It also coincided with a rising tide of brokerage leaders reporting that their top concern in this down market was regulation, not interest rates.

But even if agents expressed these concerns, they were not critical of how their brokerages have helped them navigate these waters.

Read the complete breakdown in the report below.

An overwhelming consensus

Given the anxieties felt by many in the industry, it wouldn’t have been a surprise for agents to take some of those out on their brokerage leaders. 

But that’s not what happened in late March.

• 73 percent of agents who responded to the Inman Intel Index agreed with the idea that their brokerage has done “everything it can” to help them navigate the changes from the lawsuits.
• Only 11 percent actively disagreed with the notion their brokerage had done all it could.
• The remaining respondents told Intel that they neither agreed nor disagreed.

Even more lopsided were agent responses to how prepared they personally feel for an environment where clients have more leeway to negotiate their compensation.

• A whopping 93 percent of agents in March told Intel they agreed with the idea that they could “clearly and confidently” convey their value to clients. More than 58 percent of all agent respondents “strongly” agreed with that statement.
• Only 1 percent of agent respondents disagreed with the idea that they could clearly and confidently demonstrate their value.

Clearly, in the wake of all this change, brokerages have been doing something right. Intel asked for more details to help fill out the picture.

How they did it

It all starts with training.

Since its launch in September, the Inman Intel Index has tracked what brokerages have been doing in the wake of the Sitzer | Burnett verdict and related developments.

Now, agents already have months of training under their belts as the changes from the NAR settlement approach.

• 71 percent of agent respondents in late March told Intel that they agreed their brokerage had provided “thorough and ongoing” training as the commission lawsuits have progressed.

Still, this is an area where a greater share of agents did express some level of dissatisfaction.

• 14 percent of agents told Intel they disagreed with the idea that their brokerage’s training has been thorough and ongoing, suggesting that roughly 1 in 7 members of the surveyed Inman community felt left behind when it comes to training.

For the vast bulk of the industry, that training has focused on at least three key points: using buyer agency agreements, demonstrating an agent’s value to buyers and negotiating compensation.

• More than 76 percent of agent respondents agreed their brokerage has trained or continues to train them on these three things in particular.
• A little over 12 percent actively disagreed, signaling they felt their brokerage had not provided enough training resources in these key areas.

Backing out, Intel asked a broad question meant to capture the industry’s general feelings of preparedness for the challenges to come.

• 78 percent of agent respondents told Intel they believe they have “all the tools and resources” they need, and are confident they will continue to receive them from their brokerage.
• Only 6 percent disagreed with this statement.

Intel continues to track these issues in its monthly sentiment survey. The results of the most recent survey, which concluded this week, will be available to subscribers soon.

Methodology notes: This month’s Inman Intel Index survey was conducted March 20-April 1, 2024. The entire Inman reader community was invited to participate, and Intel received 1,009 responses. Respondents for this survey were directed to the SurveyMonkey platform, where they self-identified their profiles within the residential real estate market. Respondents were limited to one response per device, but there was no limitation to IP addresses. Once a profile (residential real estate agent, mortgage broker/banker, corporate executive/investor/proptech, or other) was selected, respondents answered a unique set of questions for that specific profile. Because the survey did not request demographic information for age, gender or geography, there was no data weighting. This survey will be conducted monthly, with both recurring and unique questions for each profile type.

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This report is available exclusively to subscribers of Inman Intel, the data and research arm of Inman offering deep insights and market intelligence on the business of residential real estate and proptech. Subscribe today.

Not much has changed. Nothing will ever be the same.

Agents say they are coming to terms with these conflicting realities as they face a depressed market that has seemed to barely budge alongside new policies that many believe could hurt their prospects of courting buyers in the future.

The National Association of Realtors settlement appears to have prompted an immediate downward shift in agent optimism toward their buyer pipelines, according to responses to the Inman Intel Index survey shortly after the deal became public in March.

• Agents expressing optimism that their buyer pipelines would recover in the next 12 months plummeted from 44 percent in February to 27 percent in March.
• Meanwhile, pessimistic attitudes toward future buyer pipelines spiked from 15 percent in February to 28 percent after the NAR deal was announced.

TAKE THE INMAN INTEL INDEX SURVEY FOR APRIL

This represents one of the starkest monthly shifts in sentiment that Intel has recorded in nearly a year of surveying real estate professionals.

Read the full breakdown below.

Sea of change

Prior to NAR’s big news, agent attitudes toward future buyer conditions had become largely positive.

The market downturn in transactions appeared to have bottomed out in the eyes of agents. And by this time next year, far more expected things to get better than worse.

But in the chart below, we can see just how quickly that sentiment started to reverse after the NAR announcement in mid-March.

Chart by Daniel Houston

Above we can see that agent optimism toward their future buyer pipelines — represented in blue — swelled through the winter into early spring of this year.

Then, a sudden reversal occurred following NAR’s announcement in March, with orange-shaded pessimism creeping further into the picture.

From an agent’s perspective, this represents merely one slice of the business outlook: the buyer side, looking 12 months out from today.

Agents remain more optimistic about their listing pipelines in the year to come. Compared to the disruption to their buyer pipeline expectations, agents seem to think their prospect of attracting seller clients will be less hobbled by the new NAR rules.

• Thirty-eight percent of agents told Intel in March that they expect their seller pipelines to be heavier or substantially heavier this time next year, down from 45 percent who said the same in February.

Unlike with buyers, where the drop in optimism coincides with a rise in pessimistic responses, more agents think the new rules and market conditions a year from now will leave their seller pipelines “about the same” as they are today.

• The size of the group expecting little change in seller pipelines rose by 7 percentage points, while the pessimistic cohort of attitudes toward future seller pipelines remained about the same size month over month.

What’s more, this stabilizing outlook for seller pipelines mirrors more closely the trajectory of client pipelines in recent months — on both the seller and buyer sides.

Conditions on the ground

The analysis above reflects agent attitudes toward the future — specifically what agents expect to happen over the next 12 months.

But Intel also asked agents what conditions look like today, compared to what they remember from this time last year.

In that sense, the legal developments of the past year have yet to take a toll on pipelines, at least compared to last year’s disappointing market of the early spring.

• Agents who expressed that their listing pipelines were either heavier or substantially heavier today than at this time last year dropped from 27 percent in February to 24 percent in March.
• The share of agents who said their listing pipelines were “about the same” year over year jumped from 26 percent in February to 36 percent in March.
• This also means fewer agents reported an actual decline in their listing pipelines over the past 12 months.

Perhaps more interesting is on the buyer side, where future outlooks have worsened even as actual pipeline conditions may be finding their footing.

• Sixteen percent of agents told Intel in March that their buyer pipelines were either heavier or substantially heavier than at the same time last year, a decline from the 20 percent who said the same thing the month before.
• But the share of agents reporting clearly worse conditions on the buyer side year over year was also in decline — dipping from 49 percent in February to 47 percent in March.
• The takeaway on the buyer side? As with listings, the winnowing of clear directional observations from both extremes contributed to a rise in agents reporting buyer pipelines were “about the same” as this time last year.

Overall, the survey paints a picture of a housing market where conditions on the ground remain roughly stable for agents — even as the NAR news leaves many in the industry wondering for now where their future buyers will come from.

Methodology notes: This month’s Inman Intel Index survey was conducted March 20-April 1, 2024. The entire Inman reader community was invited to participate, and Intel received 1,009 responses. Respondents for this survey were directed to the SurveyMonkey platform, where they self-identified their profiles within the residential real estate market. Respondents were limited to one response per device, but there was no limitation to IP addresses. Once a profile (residential real estate agent, mortgage broker/banker, corporate executive/investor/proptech, or other) was selected, respondents answered a unique set of questions for that specific profile. Because the survey did not request demographic information for age, gender or geography, there was no data weighting. This survey will be conducted monthly, with both recurring and unique questions for each profile type.

Email Daniel Houston

This report is available exclusively to subscribers of Inman Intel, the data and research arm of Inman offering deep insights and market intelligence on the business of residential real estate and proptech. Subscribe today.

As the real estate industry digested an unfavorable Sitzer verdict, its leaders had more pressing concerns.

Margins were being squeezed. Hopes of much-needed interest rate cuts were fading. And recruiting had reached a fever pitch.

But the National Association of Realtors sent a jolt through the industry when it announced its settlement in late March, replacing some of those concerns with questions of how brokerages can make money in the first place, according to the Inman Intel Index survey of more than 1,000 real estate professionals.

• The share of brokerage owners or executives who told Intel that regulatory issues will be the most challenging part of the business environment over the next 12 months nearly doubled to 30 percent in late March.
• That shift means regulation is, for the first time since the Intel Index launched in September, the No. 1 challenge brokerage leaders say they face over the next 12 months. 

This category’s rise came at the expense of anxieties over interest rates, which have moved to the background even as mortgage rates continue to climb and the Federal Reserve signals it may have to delay rate cuts.

Chart by Daniel Houston

The results, collected a little over a week after the settlement details became public last month, represent a mere snapshot in time. Attitudes since then may have shifted.

Even now, Intel is surveying real estate professionals a second time since the settlement to track how persistent this shift is. Take the April survey today, and look out for the results in the weeks to come.

TAKE THE APRIL INTEL INDEX SURVEY 

In the meantime, dive into the full breakdown below to learn how NAR’s big news immediately weighed on the thinking of decision-makers at numerous brokerages.

Tomorrow’s problem, today

In one important way, the dynamics have yet to shift.

Brokerage leaders still think that regulatory headaches will be a bigger deal 12 months from now than they are today.

• 17 percent of brokerage leaders told Intel in late March that regulation was the most challenging part of the business environment today, compared to the 30 percent who said it would be the biggest issue a year from now.

Still, even this represents a large shift.

• Between the Sitzer verdict in October and the NAR settlement news in March, the share of brokerage leaders who said regulation was today’s biggest housing challenge had yet to eclipse 8 percent.

That means the latest results — if they hold — show a doubling of the share of leaders who see changes to industry compensation as the No. 1 challenge they face today.

The news also shoved one key brokerage concern a bit further away from the foreground: the risk that interest rates might remain higher for longer.

• • Prior to NAR’s settlement announcement, approximately 30 percent of broker-owners and executives said interest rates were today’s top concern.
• But in the first Intel survey after the terms of the deal became public, that same share of brokerage leaders dropped suddenly to 20 percent. 

As disruptive as brokerage leaders now expect these changes to be, the gap becomes even more pronounced when they’re asked to look ahead at the work ahead over the next 12 months.

A shift in outlook

As a future threat, the lawsuits have been on the minds of real estate leaders for months.

These leaders took seriously its potential to shake up the industry, even as they debated among themselves just how big an impact the litigation was likely to have on their business models and revenues.

Still, for many months, it was just one of a host of issues weighing on their outlooks on their businesses.

Now, regulation has emerged as the single biggest impending challenge brokers say they face.

How the perceived No. 1 challenge for the year ahead has shifted

Average of November-February surveys → March results

• Interest rates: 18% → 10%
• Regulation: 17% → 30%
• Recruiting/retaining talent: 22% → 19%
• Margin compression: 22% → 19%
• Other: 21% → 22%

Above, we can see just how much — and how quickly — regulation has jumped to the forefront of decision-makers’ anxieties.

It’s primarily replaced interest rates, but may also be increasingly top of mind for leaders who have been likely to worry about margin compression or recruiting.

Changes this dramatic require multiple months to assess, which is why Intel will continue to seek insights every month from both the agents at brokerages and the decision-makers who lead them. Take the Intel Index survey for April to lend your expertise to the Inman community.

Methodology notes: This month’s Inman Intel Index survey was conducted March 20-April 1, 2024. The entire Inman reader community was invited to participate, and Intel received 1,009 responses. Respondents for this survey were directed to the SurveyMonkey platform, where they self-identified their profiles within the residential real estate market. Respondents were limited to one response per device, but there was no limitation to IP addresses. Once a profile (residential real estate agent, mortgage broker/banker, corporate executive/investor/proptech, or other) was selected, respondents answered a unique set of questions for that specific profile. Because the survey did not request demographic information for age, gender or geography, there was no data weighting. This survey will be conducted monthly, with both recurring and unique questions for each profile type.

Email Daniel Houston

This report is available exclusively to subscribers of Inman Intel, the data and research arm of Inman offering deep insights and market intelligence on the business of residential real estate and proptech. Subscribe today.

Potential homebuyers who are aware of the National Association of Realtors $418 million settlement believe it’s a step forward for consumers, many of whom relish the prospect of negotiating compensation with their real estate agent.

This is just one of dozens of key insights gleaned from the Inman-Dig Insights consumer survey of 3,000 adult U.S. residents who are active in the workforce. 

The latest version of this survey, conducted in early April, was designed to be statistically representative of the broader population of working adults. It reflects their attitudes toward a host of real estate topics — including the commission lawsuits that have haunted brokerages and trade groups for years.

The survey findings include:

• About 1 in 4 working U.S. adults say they would not accept a rate of 2 percent of the final sales price if they were responsible for paying their agent directly. 
• 1 in 3 say they favor a flat-fee model for agent pay that is popular with consumers — nearly six times as large as the group that supported an hourly rate model.

But for most U.S. consumers, the value an agent provides is clear, and they’re willing to pay a traditional percentage of the transaction price to secure it — even if they would ultimately be on the hook for their agent’s buyer-side commission.

Read the full breakdown below.

Getting a better deal

When asked whether they were aware of the NAR settlement, 23 percent said yes.

Of those who said they knew of the settlement, a large majority — 65 percent — said they believed the settlement would benefit consumers. This group was, however, split on whether the changes were also good for the real estate industry.

On the other hand, very few consumers believe the deal would be bad for both consumers and industry professionals.

Question: You said you were aware of the settlement involving the National Association of Realtors. How do you feel about the potential outcome?

• 38.2% — Good for consumers
• 21.8% — Good for the real estate industry
• 27.1% — Good for both
• 11.4% — Good for neither
• 1.6% — Other

Why are these consumers so bullish on the deal?

For one thing, they’re generally comfortable negotiating terms, especially when it’s their own money on the line. 

And when negotiations aren’t a realistic option, consumers are often more comfortable with a flat-fee approach, as opposed to a fixed percentage of the sale price set by another party to the deal.

Question: Which of the following real estate agent fee structures would you accept if offered?

• 24.6% — A set commission percentage based on the home’s sale price
• 34.6% — A negotiated commission based on the home’s sale price
• 33.9% — A flat fee
• 6.2% — Hourly rate
• 0.6% — Other

It’s noteworthy that so few consumers are open to experimenting with an hourly rate. Those who are open to a non-traditional compensation model strongly favor the flat fee over an hourly approach.

Still, a majority of potential clients are open to a traditional commission structure based on the home’s sale price. Intel further explored what that might look like in a world where more buyers feel empowered to negotiate the fee up front.

A different paradigm

As real estate enters a new era later this year, consumers report they won’t feel intimidated about negotiating with a brokerage.

• Only 17 percent of working U.S. adults said they would feel uncomfortable negotiating a buyer’s agent fee, according to the Inman-Dig Insights survey. 

That’s essentially the same comfort level that consumers express for negotiating fees for other major purchases, such as cars or home maintenance.

How comfortable would you feel negotiating the fee of the agent who helps you buy your home?

• 22.8% — Very comfortable
• 33.6% — Somewhat comfortable
• 26.8% — Neither comfortable nor uncomfortable
• 11.7% — Somewhat uncomfortable
• 5.1% — Very uncomfortable

But just because consumers welcome a greater say in what they pay doesn’t mean all of them are looking to go cheap with the agent they work with.

If new ruIes required buyers to pay buyer’s agents directly, as opposed to having a seller pay them out of the proceeds of the sale, what is the highest fee you would pay?

• 26.2% — Below 2% of the purchase price
• 56.2% — The traditional 2% to 3% range
• 15.4% — Greater than 3%
• 2.3% — Other

Of course, these survey results reflect the attitudes of potential clients without regard for the other side of negotiations — the brokers and agents who will be loath to accept compensation rates below the traditional range. 

The changes from the NAR settlement put downward pressure on commission rates in the long run. But for now, at least, most consumers appear open to paying roughly normal rates for their buyer-side services.

Stay tuned for more insights from this broad-ranging consumer survey in the weeks to come.

About the Inman-Dig Insights Consumer Survey

The Inman-Dig Insights consumer survey was conducted from April 3 to April 5 to gauge the opinions and behaviors of Americans related to homebuying. 

The survey sampled a diverse group of 3,000 American adults, ranging in age from 24 to 65 and employed either full-time or part-time. The participants were selected based on a set of criteria that included age, gender and regional distribution.

Statistical rigor was maintained throughout the study, and the results should be largely representative of attitudes held by U.S. adults with full- or part-time jobs. Both Inman and Dig Insights are majority-owned by Toronto-based Beringer Capital.

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