In March 2024, the National Association of Realtors reached a settlement in a series of antitrust lawsuits that alleged the organization's commission practices artificially inflated real estate agent fees. The settlement, which took effect in August 2024, changed several long-standing practices that had shaped how residential real estate transactions worked in the United States for decades.

The changes are consequential for buyers — particularly first-time buyers who may not have understood how agent compensation worked under the old system, let alone the new one.

How it worked before August 2024

Before the settlement, sellers typically paid a commission of 5% to 6% of the sale price, which was then split between the listing agent and the buyer's agent. This arrangement meant that buyers received representation at no direct cost to themselves — the seller's proceeds funded both agents.

This system was embedded in MLS (Multiple Listing Service) rules that required sellers to offer compensation to buyer's agents as a condition of listing. The effect was that buyers rarely thought about or negotiated agent compensation — it happened invisibly in the background.

Critics of this system argued it created a conflict of interest, with buyer's agents potentially steering clients toward higher-priced homes to maximize commission, and sellers indirectly subsidizing representation they had no role in choosing.

What the settlement actually changed

The settlement eliminated the MLS rule requiring sellers to offer buyer agent compensation. Sellers are no longer required to offer anything to a buyer's agent as a condition of listing their property.

The settlement also introduced a mandatory written Buyer Agency Agreement. Before an agent can show a buyer homes, a written agreement between both parties is required, specifying the scope of representation, the duration of the agreement, and exactly how the agent will be compensated — including the amount or rate.

These two changes together shift the dynamic meaningfully. Buyer agent compensation is now explicitly negotiated rather than assumed. Sellers may still offer to cover buyer agent fees as part of the transaction — and many do, as a competitive strategy to attract buyers — but it is no longer automatic or built into MLS rules.

What this means in practice

In practice, the transition has been more gradual than the policy change might suggest. Many sellers continue to offer buyer agent compensation as a negotiating tool to attract more buyers to their listing. In competitive markets, sellers who refuse to cover buyer agent costs may receive fewer offers.

For buyers, the most immediate practical change is the Buyer Agency Agreement itself. Buyers now sign a written contract with their agent before touring homes — a contract that specifies what they owe the agent and under what circumstances. Reading this agreement carefully, understanding what is included and what is not, and knowing the terms for ending the relationship are now important steps in the buying process.

Compensation amounts that were once standard — typically 2% to 3% of the purchase price for a buyer's agent — are now openly negotiable. Buyers in straightforward transactions, or those with significant experience, have more options: flat-fee representation, limited-service agents, or in some cases no representation at all.

The Post-NAR Buyer Guidance tool on this site walks through the specific factors — market competitiveness, property type, experience level, contract comfort — that tend to influence what level of representation makes sense for different buyers in different situations.

What has not changed

Real estate transactions remain legally complex. Purchase contracts, contingencies, inspection negotiations, title issues, and closing processes have not become simpler because of the settlement. The settlement changed how agents are paid — not the underlying complexity of the transaction itself.

Buyers who choose to reduce or eliminate professional representation take on the full responsibility for understanding and managing the legal and logistical elements of the purchase. In competitive markets or complex transactions, the absence of experienced representation carries risks that are worth understanding clearly before making that choice.