Women Realtors May Be Hit Especially Hard by New Real Estate Rules

A slew of new rules recently took effect that are poised to permanently reshape how residential properties in the U.S. are bought and sold and how much realtors — most women — earn from the transactions.

The new rules, which went into effect August 17, cover much ground. Included in the new changes: selling agents who list properties for sale on a Multiple Listing Service (MLS), will no longer be able to use the MLS to offer a commission to buyer's agents. Another new rule eliminates the requirement that brokers subscribe to multiple listing services. Meanwhile, buyer’s agents must now enter into written agreements with their customers.

More Bargaining Power

For consumers, the biggest impact may be the changes to the commission structure agents use to bill for their services. Although some industry insiders predict home buyers could be saddled with new upfront costs when purchasing a home, the intent behind the changes in commissions is to give both home buyers and sellers more bargaining power when working with realtors.

Those changes can be traced back to October when a federal jury determined that the National Association of Realtors (NAR) “conspired to require home sellers to pay the broker representing the buyer of their homes in violation of federal antitrust law,” The court determined that the NAR’s commission structure infringed on antitrust laws because it forced home sellers to pay a fee that could be passed along to buyers. As a result of the verdict, the NAR agreed to modify its commission structure as part of a $418 million antitrust settlement.

Before the changes, commissions — which are normally billed to the seller — could run as much as 6 percent of the selling price and be divided between the seller’s agent and the buyer’s agent. The court determined such a commission structure was inappropriate.

Feeling the Pinch

Although the updated rules are intended to give consumers greater power to negotiate fees, not everyone is convinced. One University of San Diego real estate professor told the LA Times he doubts the new rules will drive commissions lower. “I haven’t seen anybody advertise [lower commissions] — either on TV, social media, magazines, newspapers — suggesting that [agents] are going to compete on price,” he said.

However, a nationwide consumer group told the newspaper that it's advising “buyers and sellers [to] set a goal of negotiating commissions of 2% of the sales price.” CNN, meanwhile, quotes one source who predicts “real estate commissions [could] fall 25 percent to 50 percent.” If that prediction proves accurate, U.S. realtors will likely feel the pinch — especially women realtors.

Why? Because, according to the NAR, sixty-two percent of U.S. realtors are female. And their role in the industry is evolving. According to Real Estate News, more women than ever earned top spots in their 2024 real estate power ranking. Fifty-three women were identified as industry leaders in the new list, up from 47 in 2023. That means if real estate commissions fall by 50 percent or 25 percent, it will be women who are most impacted.

What will this mean for women realtors?

Reduced Income: If commissions drop from 5 percent to 2 percent, the amount a broker earns from a $100,000 deal would go from $5,000 to $2,000, which will undermine the livelihood of all realtors, men, and women.

Barriers to Entry: Lower commissions may discourage prospective realtors from joining the industry, especially women who already face wage disparities in every industry, according to the U.S. Department of Labor.

Financial Inequality: Because male realtors likely have larger professional networks than their female counterparts, men may get exposed to more lucrative deals, further increasing income disparity.

Increased Pressure: To maintain previous income levels, agents will need to close more deals, likely meaning increased pressure and longer hours. For women agents, this shift could upset a work-life balance and family time.

A Shift in Focus: Women brokers may concentrate on higher-value transactions or diversify their services to make up for reduced commissions.

Although it’s unclear how the new residential real estate rules will play out across the industry, the changes clearly will impact real estate commissions. And, since most agents are women, it’s just as likely they will feel a financial squeeze in an already uncertain economy.

Millions are moving to Florida. How will this flood of new Floridians impact the real estate prices in The Sunshine State? Read Susan’s thoughts on the Florida population boom here.