A second-time homebuyer, Semih Ayhan, decided to navigate his latest property search without a real estate agent. It was a decision motivated by his first experience more than a decade ago.
“The transparency of that process, I think it’s a problem,” Ayhan said of using an agent. “I have friends who are Realtors and they might hate me for going this route, but it’s a personal choice.”
Last summer, a landmark legal settlement with the National Association of Realtors (NAR) aimed to increase transparency and competition by decoupling the traditional 5-6% commission shared by agents for the seller and the buyer.
Now, agents are supposed to negotiate their rates separately with their clients.
National forecasters predicted commissions would plummet and could force more than half of all realtors to leave the industry.
But hundreds of agents around the Twin Cities are painting a somewhat different picture in Minnesota, based on their responses to an exclusive questionnaire by 5 INVESTIGATES about the changing real estate landscape.
5 INVESTIGATES questionnaire responses
The 10-question form sent to licensed real estate agents in the Twin Cities metro area, while not scientific, aimed to take the temperature of local Realtors.
Granted anonymity, just about 12% of agents who responded admitted they are considering quitting the business.
“I went from making six figures to not enough for it to make sense to keep paying for expenses associated with being licensed,” a veteran agent wrote. “Too hard to continually fight for commissions.”
More local agents, about 23%, told 5 INVESTIGATES they expect their commissions to decline in 2025.
“I am already working with sellers offering less or nothing,” wrote one agent. “Builders have cut their offerings as well.”
But the majority of realtors, more than 300, insisted they are still thriving under the new rules.
“It’s time to weed out the awful agents we are running across with the new change,” wrote one agent with 6-10 years of experience.
Business as usual?
Kelly Brown is one of the Realtors, saying, “not a lot has changed.”
Brown told 5 INVESTIGATES that she and her team sold more than 250 properties in 2024, putting them in the top 2% of agents who responded to the questionnaire.
Brown says she’s only noticed two changes: How she and her team are “talking to buyers and sellers about their options,” as well as a tweak to her purchase agreements. Brown now leaves a section blank where she used to list the commission percentage for the buyer’s agent.
The NAR settlement also bars agents from offering compensation to a buyer’s agent on multiple listing services, generally known as the MLS.
“I only negotiate my own commission,” Brown said. “So, if I’m 4%, three and a half, whatever that is, I’m negotiating my own.”
She says it is now up to the buyer and their agent to determine what share of the commission they want to be paid.
But Brown says deals still look a lot like they did before the rule changes.
“One hundred percent of the time, the seller paid the buyer agent commission,” Brown said. “But I will say this. If somebody doesn’t want to, they don’t have to.”
Negotiating commissions
Sixty-four percent of real estate agents who responded to the questionnaire told 5 INVESTIGATES they have clients who have asked to negotiate their commission.
But over and over again, agents said that is nothing new.
“Commissions have always been negotiable,” one agent wrote. “And if you are a good agent, you explained that to your potential clients.”
The NAR settlement also requires agents to have written buyer representation agreements with their clients before they can start showing them houses.
Many agents said they received assistance with updating those forms from the Minnesota Realtors Association (MNR).
MNR declined interview requests from 5 INVESTIGATES.
In a statement, MNR said it “has never advocated for any sort of standard, and has never tracked or provided guidance to our members on commission structures.”
MNR cited “Minnesota’s strong buyer-agency laws” that have “prioritized consumer protection in real estate transactions.”
‘The old system was rigged’
Doug Miller, a local real estate attorney, insists those protections were not enough.
“The practice was to wait until a purchase agreement was signed and slip that buyer brokerage contract into the same e-signing session as the purchase agreement,” Miller said. “Buyers rarely had an opportunity to look at the contracts, let alone negotiate them.”
Miller was among the first to raise the kinds of questions that ultimately led to the NAR settlement last year.
Publications such as the Wall Street Journal heralded Miller as the man “behind the new rules roiling real estate.”
“The old system was rigged to harm consumers,” Miller said. “When you share commissions, you’re really colluding. You’re talking to your competitors about setting fees.”
He is skeptical of some industry groups who say the NAR settlement has had little to no impact on consumers.
“Buyers now have much more interest in negotiating that commission and negotiating what they get for those commissions,” Miller said. “They want to get somebody who’s really going to represent them.”
Saving money
Ayhan finally found the house he was looking for in Eden Prairie after nine months of searching on his own without a real estate agent.
“The only thing I need help with is writing a purchase agreement, negotiating, and walking through the process,” Ayhan said. “For that, the commission I’m giving up is way too much.”
Instead, Ayhan hired Miller, who is licensed to assist with real estate transactions.
Miller still collected the commission that would have gone to the buyer’s agent, but he refunded half of it, about $6,000, to Ayhan as a rebate.
“I didn’t believe it until I received the check,” Ayhan said. “To be honest with you, I didn’t believe it until the check cleared the bank.”
As a local restaurant owner, Ayhan says he has great appreciation for the value of competition and transparency. And while every transaction will not look exactly like his latest, he says he hopes it is a sign that things are changing in real estate.
“Every business, every person, whether offering a service or a product, should be able to compete,” Ayhan said. “So when you open the doors to competition, that means the consumer is going to save money.”
View more results from the exclusive questionnaire by 5 INVESTIGATES below: