Finance
Barriers to Consumer Negotiation and the Limits of Policy: Evidence from the NAR Settlement
Speaker:
Professor David Hao Zhang
Assistant Professor of Finance
Jones Graduate School of Business
Rice University
Abstract:
The 2024 National Association of Realtors (NAR) settlement aimed to decouple buyer and seller agent fees by shifting bargaining to buyers. We show in survey experiments that framing commissions in percentages and as seller-paid is sufficient to largely suppress buyer negotiation, consistent with denominator and salience biases. Using survey and administrative data, we find no meaningful change in reported negotiation, commission rates or fee decoupling post-NAR settlement. Moreover, solo buyers–the extreme case of negotiation by forgoing representation–pay 1.8–2.2% less, effectively capturing the buyer’s agent fee.
