What factors contribute to high realtor fees despite settlements?

Realtor commissions were supposed to face real pressure after the major industry settlements and rule changes, so it can feel confusing when the numbers many buyers and sellers see still look familiar. The disconnect makes more sense once you separate process from price. The settlements changed how compensation is disclosed and negotiated, but they did not automatically force the market to adopt a new pricing model. In real estate, shifting a long-standing norm takes more than new paperwork. It takes changes in incentives, financing, and behavior, and those forces move slowly.

A major reason fees remain high is that the settlement reshaped transparency more than it reshaped affordability. For years, many transactions worked in a way that kept commissions out of sight for buyers. Sellers typically paid a total commission from sale proceeds at closing, and that amount was split between the listing agent and the buyer’s agent. Even when buyers were indirectly paying through the home price, the money did not feel like a separate expense. When new rules push buyer representation fees into earlier conversations, the economic reality of the buyer’s cash constraints becomes more obvious. Many buyers already arrive at closing juggling a down payment, inspection costs, moving expenses, reserves, and sometimes appraisal gaps. Adding a separate check for representation can feel impossible, even when the buyer values the service.

That creates a financing friction that keeps the old structure alive. A seller may still offer to cover some buyer-side compensation, not because the seller loves the idea, but because it can make the property easier to sell. If covering a buyer agent’s fee helps keep the buyer pool larger and more qualified, it becomes a tool to protect demand. In that sense, commissions stay sticky because they remain tied to deal completion. The system rewards whatever makes the transaction easier to finance and easier to close, and in many markets that still means folding professional fees into the overall transaction rather than pushing them into the buyer’s out-of-pocket costs.

The structure of the brokerage market also helps explain why price competition does not immediately show up as lower rates. Real estate brokerage is fragmented, and consumers rarely shop for agents the way they shop for mortgage rates. Most people pick an agent through referrals, a familiar name on a sign, or a quick connection at an open house. That method favors trust and convenience more than side-by-side price comparison. When consumers do not consistently compare fees across multiple options, the market’s “normal” commission range can persist even if commissions are technically negotiable. The settlement can remove a rule and still leave a culture where many participants default to customary percentages because it reduces friction and avoids uncomfortable conversations.

Home prices also play a quiet role. Even if the percentage stays the same, the dollar amount rises when the home price rises. A commission that looks stable on paper can feel more expensive simply because it is being calculated on a larger base. This helps explain why some households feel that realtor fees are staying high, or even getting higher, even when the public conversation suggests there should be downward pressure. The market may be debating the percentage, but buyers and sellers are experiencing the dollars.

Then there is the human side of the transaction, which is often underestimated. Buying or selling a home is one of the most stressful financial decisions many people make, and stress pushes people toward defaults. When deadlines are tight and the stakes feel high, many consumers prioritize avoiding mistakes over saving a fraction of a percent. Agents understand this dynamic and may frame their fee as protection, expertise, and risk management. In response, clients may avoid negotiating because they fear damaging the relationship with the person guiding them through inspections, contingencies, and closing. Even with better transparency, negotiation is not automatic. It requires confidence, time, and emotional bandwidth, and those are in short supply during a move.

This is why the new buyer representation agreements matter in a very practical way. They shift the compensation conversation earlier, before a buyer is attached to a particular home. That timing can be uncomfortable, but it is also the moment when a household has the most leverage to think clearly. Once a buyer has fallen in love with a property, the desire to win the home often overwhelms the desire to negotiate the terms of representation. Early clarity forces the question that many people used to postpone: what are you paying for, what exactly is included, and what happens if the seller offers little or nothing toward the buyer agent’s compensation?

Sellers are facing a parallel shift. If compensation offers are no longer presented in the same standardized way across platforms, sellers have to decide more deliberately how they want to position their listing. In a fast market, a seller may feel comfortable tightening costs because demand is strong. In a slower market, offering buyer-side compensation can still be a competitive lever, especially when many buyers are already stretched. The seller’s decision is less about tradition and more about strategy: does covering some or all of that cost help attract more buyers, reduce time on market, or prevent the negotiation from breaking down later?

Another reason fees have not collapsed is that the industry is still adapting, and adaptation usually arrives as compliance first and innovation later. In the wake of litigation and regulatory scrutiny, many brokerages focus on revising contracts, updating training, and reducing legal exposure. That work can make the system clearer without making it cheaper. A market can become more transparent while still remaining expensive, at least in the short term, because the deeper forces that would produce price competition take time to build. Consumers need better tools to compare services, agents need business models that can profit at lower effective rates, and buyers and sellers need enough confidence to insist on customized arrangements rather than defaults.

For households trying to plan, the most useful takeaway is that the settlement opened a door, but it did not push anyone through it. The opportunity now is to treat commissions the way you treat other major transaction costs, as something to model, discuss, and negotiate calmly. Buyers should read representation agreements with the same seriousness they give to a loan estimate, because the agreement defines maximum exposure and clarifies what happens under different scenarios. Sellers should evaluate commission not only as an expense, but as part of a broader pricing and marketing strategy that can affect demand and the smoothness of closing.

In the end, realtor fees remain high for the same reason many prices remain sticky after any rule change. The rules can shift the conversation, but they do not instantly change incentives, financing constraints, and habits. Over time, clearer agreements and more open negotiation may produce more variety in how representation is priced. For now, many transactions continue to settle into familiar ranges because it still makes the deal work for the people most likely to walk away when cash gets tight or uncertainty rises.