Real estate agents largely felt prepared to tackle the business practice changes outlined in the National Association of Realtors’ (NAR) commission lawsuit settlement agreement , according to the recently published Stephens Summer 2024 Real Estate Agent Survey.
This is the seventh edition of the private investment bank’s quarterly survey. Responses for the newest edition of the survey were collected from Aug. 9-23. The NAR settlement business practice changes went into effect nationwide on Aug. 17. The report was written and prepared by John Campbell and Jonathan Bass.
In total, 85% of agents surveyed reported that they felt “fully prepared” or “somewhat prepared” for these changes. And 90% of agents at what Stephens refers to as “traditional” brokerages — which includes firms like RE/MAX, Anywhere, Keller Williams, Compass and Douglas Elliman — reported being fully or somewhat prepared. This compared to 78% of agents at so-called “disruptor” brokerages such as eXp Realty, The Real Brokerage, Fathom Realty and HomeSmart.
Overall, less than 4% of agents reported feeling unprepared or were not familiar with the practice changes at all.
A majority of agents (82%) reported that their brokerages either completely or mostly prepared them for the changes. But again, agents at more traditional firms (86%) reported that their brokerages properly prepared them, a higher share than those at disruptor firms (76%). Only 6% of all agents surveyed reported that their firms provided little to no preparation.
The survey results also showed that more agents are optimistic about where the housing market is headed, which the report authors attribute to cooling mortgage rates and the expectation that the Federal Reserve will cut benchmark interest rates later this month.
Overall, 9% of agents surveyed said they expect the housing market to “sharply improve” over the next 12 months, up 5 percentage points from the prior quarter. Another 42% of agents expect the market to “modestly improve,” another 5-point quarterly improvement.
Despite this rise in optimism, roughly 20% of agents say they expect the market to get “modestly worse” over the next year.
In response to the question, “What do you feel is the biggest threat to the industry?” 39% of agents at disruptor brokerages responded that it was “more consumers willing to buy/sell a home without an agent,” while the most common response among agents at traditional firms was an economic recession (25%).
Another popular choice among all agents was interest rates, but the two cohorts also differed on their thoughts about the Department of Justice (DOJ). Roughly 18% of agents at traditional brokerages cited the potential for the DOJ to ban cooperative compensation as the biggest threat, compared to 0% of agents at disruptors.
Additionally, despite recent headlines, only 5% of all agents surveyed said that commission compression was the largest threat to the industry. Still, roughly 86% of agents believe that some level of commission compression will occur over the next 12 months.
Compared to prior surveys, Stephens reported that commission negotiations appear to be happening more frequently, with 16% of agents reporting a notable change, up 9 percentage points from the Fall 2023 survey.
“We have been expecting increased consumer engagement on the commissions front given how widespread/high profile the industry’s legal battles have been thus far, but we were surprised to see that it has already reached above the halfway mark,” the report stated.
In light of buyer broker compensation offers being removed from MLSs — and agent frustrations with NAR — more than half of those surveyed said they see less value in the MLS system and roughly 60% said they see less value in being a NAR member.
When it comes to listing portals, roughly 30% of agents report that they are using at least one site listing or sell-side agent advertising product, including CoStar‘s Homes.com membership, Zillow‘s Listing Showcase or Realtor.com‘s Listing Toolkit. Additionally, 25% of agents not using one of these products say they are open to using one.
“We believe that this response rate could translate to an encouraging potential pipeline for the portals,” the report states. “Each portal has laid out fairly compelling return on investment math that supports the notion that these products could one day become table stakes (especially as/if the competition for listings picks up post-industry shifts).“
The report notes that while roughly 25% of agents serves “as just a piece of the market,“ this translates to an annual opportunity of $2 billion. This is based on 25% of the 1.5 million NAR members (375,000 agents) at $500 per month.
Among the agents surveyed, Realtor.com remains the favored portal among agents, with just over half reporting that they recommend Realtor.com to clients. But this is down from roughly 66% in Stephens’ first quarterly survey.
In contrast, Homes.com is gaining popularity among agents, with roughly 20% of those surveyed reporting it is the site they recommend to clients, up from roughly 2% in the Winter 2023 survey. Despite having the most web traffic, only 26% of agents reported that they recommend clients use Zillow.