What the 2024 NAR Settlement means for you

How the March 2024 NAR Settlement Changed Real Estate Commissions

If it’s been a while since you last bought or sold a home, you might be surprised to learn that the March 2024 National Association of Realtors (NAR) settlement has significantly changed how broker commissions work in real estate transactions.

Previously, it was standard for the seller to pay the total real estate commission—typically 5–6% of the sale price—split between the listing agent and the buyer’s agent (usually 2.5–3% each).

The lawsuit that led to the settlement claimed that NAR’s long-standing policies, particularly those requiring home sellers to offer a commission to buyers’ agents, inflated commission rates and limited transparency and competition within the industry.

What Changed After the Settlement

As part of the settlement, NAR agreed to two major changes (as outlined on the NAR website):

1. No More Commission Offers on the MLS
   MLS (Multiple Listing Service) listings can no longer include offers of compensation to buyer’s agents. However, buyers and sellers can still negotiate compensation off the MLS through direct discussions with their real estate professionals.

2. Written Buyer Agreements Required
   Agents working with buyers must now enter into a written agreement before showing any homes. These agreements—whether for a single showing, a non-exclusive arrangement, or an exclusive buyer’s contract—outline the agent’s services and compensation so that both parties clearly understand the terms upfront.

What This Means for Buyers and Sellers

Commissions are now more negotiable and transparent than before. While buyers and their agents must agree in writing on how the agent will be paid, the buyer’s agent commission can still be addressed during the offer negotiation process.

In practice, that means a buyer may propose that the seller cover part or all of their agent’s fee as part of the offer—or choose another arrangement that best fits their situation.

These changes are intended to promote greater clarity, flexibility, and competition in how real estate professionals are compensated, benefiting both buyers and sellers in the long run.