Navigating new commission structures in real estate: How lead scoring can help agents adapt

The real estate industry is undergoing a major shift. In March 2024, the National Association of Realtors (NAR) reached a settlement that will change how real estate agent commissions are handled. Under the new rules, sellers will no longer be required to offer compensation to buyers’ agents via the MLS (Multiple Listing Service). Instead, buyers and their agents must negotiate compensation directly, rather than relying on a commission included in the home’s sale price. While this change is intended to increase transparency, it also adds complexity for buyers, who must now determine how they will compensate their agent—potentially before viewing homes. This shift could lead to more negotiation hurdles and uncertainty, potentially slowing down transactions for both buyers and agents. This new landscape presents a significant challenge for real estate agents who have historically relied on the established commission structure.

In this evolving landscape, one thing has become clear: data-driven decision-making, particularly through the strategic use of lead scoring, is now essential for real estate agents to thrive. With commissions becoming more negotiable and unpredictable, agents need to focus on the highest-potential clients. Faraday’s predictive lead scoring agents—leveraging advanced AI to provide unparalleled accuracy in identifying and prioritizing prospects in this shifting market—help real estate professionals prioritize the right prospects, streamline their pipeline, and navigate the new commission structure with confidence.

The impact of new commission rules on real estate agents

The most significant change in the new commission rules is the requirement for buyers' agents to have a written agreement with clients about fees before showing any properties. This means buyers will be more directly aware of how much they’re paying for representation, making it crucial for agents to clearly communicate their value.

At the same time, some predict a "price war" will erupt, with buyers' agents competing fiercely for clients in an attempt to offer lower fees. Others fear this change will create confusion and extend the home-buying process, especially for first-time buyers who are already navigating high prices and interest rates.

How lead scoring helps

In this new environment, agents who can prioritize high-value leads will have a significant edge. Lead scoring can use data to assess which leads are most likely to convert, allowing agents to focus their time and resources on the clients who are most likely to result in a sale. Faraday’s agentic lead scoring models analyze a wide range of signals—from behavioral patterns to buying intent—to give agents a clear picture of which leads are worth pursuing.

With Faraday’s platform, agents can assess leads in real-time, adjusting their strategies quickly to align with changing market conditions. Instead of wasting time on leads that aren’t ready to engage, agents can focus on those who are most likely to convert, maximizing their chances of closing deals while keeping costs in check. Agents using predictive lead scoring have reported a significant increase in conversion rates by focusing their efforts on the most promising leads.

Addressing the new challenges for buyers and sellers

The new commission structure also increases transparency, but it has its drawbacks. Buyers will be more aware of the costs of hiring an agent, and many may feel the pressure to negotiate commissions themselves. Sellers, meanwhile, could face more complicated negotiations if buyers demand concessions or if they struggle to cover commission fees upfront.

Lead scoring helps agents respond to these challenges by providing a data-driven way to approach both buyers and sellers. For buyers, lead scores can indicate their level of urgency and financial readiness, helping agents tailor their approach to address potential commission concerns proactively. For sellers, understanding buyer agent interest and engagement through lead scoring can inform strategies for offering competitive compensation. Agents can use lead scores to identify clients who are ready to negotiate or those who may need additional support. This allows agents to tailor their approach to meet each client's specific needs, whether that’s offering strategic advice on negotiations or focusing on clients who are already financially prepared.

Stay ahead in a shifting market

As commission structures continue to evolve, and the world around us changes every day, the real estate industry faces both challenges and opportunities. Agents who embrace data-driven tools like lead scoring will be better equipped to adapt to these changes and thrive in a competitive market. By focusing on high-value leads, real estate professionals can ensure that they’re making the most out of every opportunity—even in uncertain times.

Faraday’s predictive lead scoring tools provide real estate agents with the insights they need to make smarter, more strategic decisions. In a world where commissions are more negotiable than ever, having a clear understanding of lead potential is key to staying ahead.

Ready to transform your real estate business?

Learn more about how Faraday can help you navigate the new real estate landscape and stay ahead of the competition. Request a demo to see Faraday in action and discover how our AI-powered lead scoring can revolutionize your business.