The real estate industry changed forever in 2024 when the National Association of Realtors (NAR) settled a landmark lawsuit and agreed to overhaul how agent commissions work. The new rules took effect in August 2024 and are now fully in force for 2026. If you're planning to buy or sell a home this year, understanding these changes could save you tens of thousands of dollars.
What Were the Old Rules?
Under the traditional system, the seller paid a total commission — typically 5–6% of the sale price — that was split between the listing agent and the buyer's agent. This meant the buyer's agent was paid by the seller, which created a significant conflict of interest: the buyer's agent was technically being paid by the person on the other side of the negotiation.
Buyers often had no idea what their agent was being paid, and the system essentially hid the cost of buyer representation inside the seller's closing costs.
What Changed?
Under the new NAR rules:
- Buyer's agent commissions can no longer be advertised on the MLS. Sellers cannot offer compensation to buyer's agents through MLS listings.
- Buyers must sign a written agreement with their agent before touring homes. This agreement must specify what the buyer's agent will be paid.
- Compensation is now negotiable. Buyers and sellers can still agree to have the seller pay the buyer's agent, but it must be negotiated separately — not built into the MLS listing.
What This Means for Buyers
You now have real negotiating power. Before signing any buyer's agency agreement, ask your agent: what are you charging, what services are included, and is this negotiable? Many buyers will now choose to negotiate a lower commission, or to pay a flat fee for specific services rather than a percentage of the sale price.
You also have the right to ask the seller to cover your agent's fee as part of your offer. Many sellers will agree — especially in a buyer's market — because it helps close deals.
What This Means for Sellers
You are no longer obligated to offer buyer's agent compensation. You can list your home, pay only your listing agent, and let buyers handle their own representation costs. This could mean significant savings at closing.
That said, offering to cover some or all of the buyer's agent fee can still be a powerful marketing tool, particularly in competitive markets where you want to attract the most buyers.
The Bottom Line
The NAR rule changes are the biggest shake-up in residential real estate in decades. The buyers and sellers who understand them will have a significant advantage over those who don't. For a deeper dive into how to use these changes to your benefit, it's all covered in detail in Real Estate Revolution.
Patrick Palzkill is a Massachusetts real estate broker (License #9186) and author of Real Estate Revolution. For a free consultation, call 617-285-6330 or visit BeaconRockHomes.com.
0 comments