Many New Hampshire real estate brokers and agents are continuing to struggle more than half a year after historic changes to the industry’s commission-payment system.
A recent New Hampshire Association of Realtors survey of its members shows that 44 percent of respondents think their businesses have “felt either significant or moderate disruption” since new commission-related rules were established late last summer.
That’s down slightly from 47 percent who in a prior survey last year said their businesses had experienced significant or moderate disruptions due to new rules tied to the National Association of Realtors’ landmark settlement of commission-related lawsuits.
But the latest results clearly show that more respondents than not continue to struggle with major or moderate disruptions, with only 41 percent recently saying changes have either had “no impact” or “caused minor disruption.”
Meanwhile, only 15 percent of the respondents said the national settlement has caused “a net positive, as it has provided me with a competitive advantage based on my ability to communicate with buyers and sellers,” compared to 9 percent who responded the same way in last year’s survey.
A ‘Learning Curve’ but Slight Improvements
NHAR officials say the results aren’t too surprising, considering the extent and sometimes confusing nature of required changes.
“I think it’s fair to say that our members have had a wide range of reactions to the settlement, which was to be expected with such significant change,” David Cummings, a spokesman for the NHAR, said in a statement to The Registry Review.
Susan Cole, the 2025 president of the NHAR and owner of the Susan Cole Realty Group LLC in Lebanon, agreed that rule changes clearly had a negative impact at many real estate firms.
“We saw some limited disruption,” she said. “It’s been a learning curve for a lot of [agents]. We expected there would be a learning curve.”
But she said the most recent survey, taken earlier this spring, did show slight improvements among those experiencing disruptions, indicating local industry officials are slowly adapting to the new commission rules.
“We have navigated through many of the challenges,” said Cole. “We have been able to make adjustments.”
The NHAR only released a limited amount of the survey results, so it’s unclear exactly what type of business disruptions have been hitting firms.
But national industry experts have long warned, and local industry players have since anecdotally confirmed, that the majority of disruptions are more likely to occur on the buyer side of the commission equation.
Mostly Impacting Buyer Agents
In brief, last year’s NAR settlement did away with the old system of listing agents telling sellers that they’d handle payments to buyer agents out of their own commissions.
Now home sellers must agree to a separate commission rate for the listing agent – and a separate commission rate, if any, for the buyer agent.
In addition, agents are now required, not just advised, to sign buyer agreements before showing any homes to those seeking to acquire a house or condominium.
Meanwhile, commission terms can no longer be listed on multiple listing service outlets, requiring buyer agents to call listing agents to find out whether a seller is offering a buyer-agent commission – and, if so, at what amount.
Early last fall, a T3 Sixty report, edited by well-known industry expert Stefan Swanepoel, predicted that the biggest challenges resulting from the NAR’s settlement would occur on the buyer-side of the real-estate industry.
And that’s exactly what agents reported to The Registry Review last November: The majority of problems were indeed happening on the buyer-agent side.
The most common problem: confusion among buyers. The second most common problem: Buyers balking at paying a commission out-of-pocket if a seller refused to compensate a buyer agent. And a more distant problem: Sellers refusing to pay any commission.
Since that Registry Review story late last year, not much has changed.
Adam Dow, CEO of the Dow Group at Keller Williams Coastal, Lakes and Mountains Realty, said some buyers simply don’t want, or can’t afford, to pay a buyer-agent commission if sellers refuse to do so.
“I’ve had some buyers walk away from deals,” he said. “There’s still a lot of confusion out there.”
The new change can hurt buyer-agent pay, or at the least make pay more tenuous from deal to deal, Dow said.
But it’s ultimately the buyers, not the buyer agents, who are suffering because some of them no longer have an expert representing them on deals.
“The new [commission] system hasn’t impacted the cost of homes,” he said. “Home prices are still high and going higher.”
Some Sellers Offer, Others ‘Don’t Get It’
Susan Bradley, a broker associate at Coldwell Banker Realty in Gilford, said she personally likes that agents, both buy- and sell-side, have to spend more time explaining commissions to people.
“I think it makes us do our job better,” she said.
But she acknowledged the new system is confounding to some.
“It can get a little confusing,” said Bradley. “It requires a little more explaining. It’s a more complicated process.”
Most sellers are agreeing to pay commissions to buyer agents, under the belief they’ll bring more potential buyers, and thus more potential bidders, to view homes, Bradley said.
But there are some sellers who “just don’t get it” and refuse to pay a buyer-agent commission. The result: fewer bidders and/or lower bid prices from potential buyers trying to make their budgets work.
Bradley said the buyer-side complications have led to slightly lower pay for some buyer agents.
“It’s modified income somewhat, but not drastically so,” she said.
Dow said one issue really bothers him: the pressure to negotiate commission terms before agents even have time to get to know customers.
“It’s off-putting,” he said of negotiating commissions so soon in the process. “I don’t like forcing someone into a contract on Day 1. We have to get commissions worked out even before we know many things, including establishing a home price range. It seems like [the process] is backwards.”
