NAR's proposed rule changes, part of its $418 million settlement, aren't a "decoupling" of commissions, but could mitigate buyer agents if homebuyers forgo representation to avoid or are unable to pay those fees. That factor could make listing agents a stronger referral source for lenders, once updates are slated to go into effect in July. 

So the new rules could hurt groups such as minority, low income and first-time homebuyers, who are likely to struggle funding closing costs and downpayments in scenarios where the seller won't cover their agent's costs, industry veterans said. Those scenarios are compounded by impacts on lending for Department of Veterans Affairs and Federal Housing Administration loans, where rules on seller concessions and commission payments themselves conflict with the proposed new normal.

"Part of that settlement may be, does Congress act fast enough to make this available in July?" said Michael Downer, a Realtor with Coldwell Banker in Florida. "If they don't do it by then, it does affect so many people."

What's changing

The pending changes include a ban on listing compensation offers on Multiple Listing Services, in an effort to address the prior, alleged anti-competitive structure. Traditionally, both buyer and seller agents split a 6% commission out of the home's sale price. NAR's settlement will also require written agreements between Realtors and clients, while commissions can still be negotiated outside an MLS.

Experts believe the new buyer agent role will create more negotiating and commissions savings. Downer said the new guidelines will also prevent "guiding," or agents pushing buyers toward homes with larger commissions; a phenomenon often called "steering."  

"There will be a dramatic amount of agents who will get out of the business because they don't know how to demonstrate that value that serves the consumer better," said Downer. "This transparency is a beautiful thing for the industry."

Affordability concerns

A new burden for home buyers to pay their agents, whether through an agreed-upon commission, flat fee or other compensation model, could dampen their purchasing power.

"When most first-time home buyers are struggling coming up with a total closing cost and downpayment to begin with, I think it's a challenge," said Gene Thompson, president and CEO of Houston-based InterLinc Mortgage. 

Homeowners won't be so motivated to cover a buyer agent's commission in a seller's market like today's beset by high home prices and low inventory, he added. 

David Dworkin, president and CEO of the National Housing Conference, cited a 2022 economic study which suggested altered commissions would have wide-ranging impacts. A commission burden on homebuyers would increase racial and economic disparities in homeownership rates, slice the demand for starter homes, and subsequently depress property values, researchers wrote.

"Some consumer advocates suggest that homebuyers who can't afford to pay their agent upfront may not be ready for homeownership," wrote Dworkin. "Under that logic, we will never close the homeownership gap for Black, Latino and Asian and Pacific Islander homebuyers."

Beyond the monetary loss, buyers who forgo hiring a Realtor could miss out on proper negotiating expertise, said Christopher Thomas, a mortgage loan originator and co-founder of Michigan-based Iris Mortgage. 

"When you just don't have those buffers or mediators things can go south a lot quicker," he said. 

Government-sponsored loan hurdles 

The looming compensation requirements also run up against guidelines for FHA and VA mortgages. Buyers getting a VA-guaranteed mortgage can't pay commissions, and sellers can't pay more than 4% of the total home loan in seller's concessions, including broker's fees; that limit is 6% for FHA mortgages. 

Buyers in an altered landscape can run afoul of those rules. The Community Home Lenders of America is likely to address Congress soon regarding the issue, said Scott Olson, the organization's executive director. 

"We have noticed for several years that sellers already discriminate against first-time home buyers using FHA loans, as opposed to say all-cash buyers," he said. "And what we don't want to happen is that in this process, that phenomenon is going to be exacerbated."

Analysts with Keefe, Bruyette and Woods have suggested the Federal Housing Finance Agency and other government housing stakeholders are discussing commissions updates to underwriting guidelines. The FHFA did not respond to multiple requests for comment. 

Mortgage veterans said they either hadn't heard of such talks, or were unsure what such changes would look like. 

"There's no scenario where Congress doesn't say, "We're not in favor of housing, we don't want to protect our veterans, we don't want to protect minorities and first-time buyers,'" said Downer. "They will figure that out, it's too big a market."

Lender-Realtor relationships 

Buyers who can afford to close on a home but who don't pay a Realtor will still prequalify for mortgages. Those consumers will need more education from mortgage lenders, Thompson said. 

Matt VanFossen, CEO of Absolute Home Mortgage and board member at CHLA, has previously predicted risks for lenders as their buyer agent referral partners potentially exit the industry. Any exodus would make remaining Realtors, particularly listing agents, especially valuable. 

"The vendor list that I work with is more important than ever, because I have to get you the best value for your property," said Downer. 

Still, many experts are suggesting a wait-and-see approach as the changes unfold. The settlement is pending approval by a federal judge. The U.S. Department of Justice may also weigh in, as it did in a separate settlement agreement between an MLS and plaintiffs in Massachusetts. 

Borrowers meanwhile aren't asking many questions about the settlement and its changes yet, lenders said. Recent research shows consumers are largely unaware of the commission structure; Just 11% of Americans are aware of the average 6% commission rate, according to research by Clever Real Estate. 

"I haven't had a client speak about it because it's not in place yet," said Thomas. "I got an accepted agreement today showing that there was a 3% commission on the MLS ticket, which is about to be outlawed. But it's just not relevant at the time."