When Mike Chambers was ready to sell his house in Boulder, Colo., last month, he interviewed a handful of real estate agents who promised he could fetch $2.75 million or more if he listed with them.
But the promise would come at a cost: Each agent wanted him to pay a commission of at least 5 percent, or $137,500.
Frustrated that not a single agent was willing to budge on the rate, Mr. Chambers, 39, decided to sell his house on his own, and he took to social media with the handle @realtorshateme to chronicle the process. His reels drew 50,000 views or more.
Within days, local agents were making their own social media posts that countered his points — an action that Mr. Chambers described as an aggressive campaign aimed at preventing him from making a sale on his own.
Call it the Realtor recoil.
What was hailed as a watershed has so far produced a mere drizzle.
Some economists predicted the rule change would upend the business model and bring competition to a long-stilted marketplace, breaking the standard 6 percent rate — one of the highest rates in the world — and forcing down home prices as a result.
Though average commissions appear to be slipping, industry watchdogs say that Realtors and their brokerages have used workarounds and pressure on sellers like Mr. Chambers to subvert the settlement. So far, they’re finding success.
“The industry understood the threat to 5 or 6 percent rates right away, so looked for opportunities to discourage negotiation,” said Stephen Brobeck, a senior fellow at the Washington, D.C.-based Consumer Policy Center, who has been vocal about the need for greater consumer awareness in the real estate industry.
Real estate commissions in the United States have long been baked into a home’s listing price and then paid by the seller to their agent. The agent would then split that payout with the agent who brought a buyer, usually with 2.5 to 3 percent for each.
The rate of the commission split was communicated on private listing databases available only to agents, called multiple listing services, and in the lawsuit that lead to the settlement, a group of home sellers in Missouri argued that the covert sharing of rates led to a lack of transparency about whom, and how much, home sellers were required to pay. They also argued it inflated fees.
A jury agreed, and N.A.R. and the brokerages were ordered to pay nearly $2 billion in damages. The settlement came five months later, with the N.A.R. agreement to end the practice of commission-sharing over MLS databases as part of the deal. N.A.R. also agreed to pay $418 million to settle the claims, and some brokerages separately settled for millions of dollars.
“The system has been in place for 100 years. It’s not going to change overnight,” said Michael Ketchmark, the lawyer who represented the Missouri homeowners. “It’s not like one day we started streaming movies and then Blockbuster video stores were suddenly gone. It was a slow progressive change in technology and that’s what we’re witnessing here.”
Many agents say that since the settlement, they’ve felt cornered by buyers and sellers alike to defend their value. Jeremy Larsen, a Realtor in Dallas, said that consumers who decide to navigate the home market without an agent are taking huge risks with their money.
“It’s like walking into a courtroom without an attorney. Why would you do that? There’s so many possible things that can go wrong,” he said.
Sellers who want to sell homes on their own “can sit on Zillow all day long,” he said, but he believes that without the guidance of an agent, most of them would price their home too low or falter in negotiations. And buyers looking for a mortgage may not choose the right lender.
“It’s such a critical purchase for people, and there’s not someone in your corner,” he said.
One viral Instagram video, created last month by a Realtor in Fresno, Calif., with 114,000 followers, shows a man driving down a suburban cul-de-sac and encountering a seller’s agent standing outside a house for sale with a sign that reads “0 percent” — referring to the amount of commissions the sellers were willing to pay any agent who brought a buyer.
“Hell, no,” the narrator says.
At the house next door, also for sale, an agent holds a sign that reads “3 percent.” The man pulls over and says he’d like to take a look.
The video may have been a joke, but its message was clear: Many agents, now banned from making offers of commission to each other on private Realtor-only databases, are not adapting to the intent of the settlement. Rather than encouraging buyers to now negotiate rates on their own, they continue to press sellers to offer commissions of 5 or 6 percent, and then discuss commission splits among themselves.
Those commission splits are largely happening the old-fashioned way: phone, email and text. In one TikTok video viewed by The New York Times, a real estate coach in Virginia with 60,000 followers, trains her viewers on how to build a landing page for each of her listings that sends automated messages to buyers’ agents informing them of the commission they will receive if they bring a buyer.
“It only took a matter of weeks really, for most agents to find a loophole. It’s almost a joke,” said Nick Aufenkamp, a Realtor in Washington who started a coaching business, DIY Homebuyer Academy, after the settlement to help buyers learn how to represent themselves in real estate transactions.
“There’s a huge reluctance to see any change in this industry,” Mr. Aufenkamp said. He estimates he has coached 30 clients who wanted to represent themselves in a home purchase and ran into a wall.
The National Association of Realtors “is resolutely opposed to any attempt to circumvent the settlement,” said a spokesman, Troy Green, who added that any attempts from agents to influence buyers’ or sellers’ decisions in order to gain more commission “is unequivocally not something that N.A.R. condones.” The organization has a fact sheet on its website explaining that steering is a violation of their code of ethics.
But Mr. Green added that the settlement “expressly allows” agents to communicate offers of communication between each other on venues outside of the MLS databases.
And there lies the rub, said Doug Miller, a Minnesota lawyer who five years ago brought one of the first lawsuits over inflated commissions to Cohen Milstein, a Chicago law firm.
“The N.A.R. settlement solves MLS steering. It did not solve steering,” he said. “Sharing is caring. Unless you’re a Realtor, and then it’s collusion.”
Some agents have turned to the legislative process to protect commission sharing. A few months after N.A.R. lost its lawsuit, Oklahoma state Senator Paul Rosino, a former broker, cosponsored a bill requiring agents on both sides of a transaction to share their fees in writing. With the support of Oklahoma’s influential Realtor association, that bill passed, and went into effect, in May.
The New York Times interviewed 15 buyers and sellers across the country, from Colorado to Ohio to Arizona and beyond, who said they were blocked out of the market when they tried to negotiate commissions, or navigate transactions without a real estate agent.
In Boulder, Mr. Chambers’s home listing caught the eye of a local real estate agent, Lindsay Alfano. Ms. Alfano, 25, has been an agent for two years. She said Mr. Chambers had promised to pay a buyer’s agent commission, and she told fellow agents at her brokerage, eXp, that she was planning to show the house to her buyers.
She received text messages mocking her and encouraging her to change course. The New York Times reviewed the messages.
“You’re working for free,” one colleague said.
“Sell your own listings,” another wrote. “This is embarrassing.”
Ms. Alfano described her peers’ reaction as eye-opening. “The amount of people that were so scared of this guy having access to what we do was a rude awakening for me,” she said in an interview. “The word is steering. If you’re worried how much you’re going to get paid based on the home that your client loves, you’re doing it for the wrong reasons.”
Mr. Chambers found a buyer in early March and his home is now in contract. He is now focused, he said, on building a new company that he says “will disrupt the real estate industry.”
“I wanted to pay someone for their services, of course, but I don’t want to just light money on fire because there’s a system that’s forcing me to,” he said.
