NAR Settlement Commission Changes: What Actually Changed

What the NAR settlement actually changed

In March 2024, the National Association of Realtors agreed to settle a group of antitrust lawsuits brought by home sellers. The headline was money and rules. The National Association of Realtors reached a $418 million settlement to end multiple antitrust lawsuits brought against it and other brokerages by home sellers. The rule changes, not the check, are what touch your transaction.

Two practice changes took effect nationwide on a single date. Under the settlement, offers of compensation are prohibited on Multiple Listing Services, and an agent working with a buyer must enter into a written buyer agreement before the buyer can tour a home. The old model, where the seller was responsible for compensating both the buyer's and seller's agents, and the cost of the buyer's agent was thus opaque to the buyer even though they may have effectively paid some or all of it through a higher transaction price, is what the lawsuit targeted.

Here is the nuance that gets lost in headlines. Removing the compensation offer from the MLS did not ban sellers from paying a buyer's agent. Offers of compensation are prohibited on the MLS, but they continue to be an option consumers can pursue off-MLS through negotiation and consultation with real estate professionals. The number moved out of a database field and into a conversation and a contract. That is the whole change in one sentence.

Did buyer-agent commissions actually fall?

Short answer: no, not nationally. The 2024 coverage promised the 6% model was dead and sellers would bank the savings. The data since tells a quieter story. Nearly two years after the settlement changed how agents are paid, the average buyer's-agent commission is up, not down.

Redfin, which tracks the transactions its own agents handle, put numbers on it. In the third quarter of 2025 the average buyer's-agent commission was 2.42 percent, up from 2.36 percent a year earlier, putting the rate back near where it sat in early 2024 before the rules took effect. An earlier reading showed the same direction. A separate Redfin reading showed the spring 2025 figure at 2.43 percent, up from 2.38 percent a year before.

Combined commissions, both sides added together, tell the same story. Agent surveys put the total rising from 5.32% to 5.44% in 2025. If you want the deeper breakdown of who takes what, our guide to how much Realtors charge in commission walks through the full split. The takeaway here is blunt: the mechanism changed, the bill did not shrink.

The honest counterpoint: why the compression never came

This is the part marketing pages skip. If the point of the MLS rule was to force rates down, why didn't it work? Because the MLS rule was never the thing setting the price.

The Federal Reserve ran the natural experiment before the national rules ever landed. The analysis found that rising home prices are likely why commission rates fell over the past two decades, but found no impact on rates after buyer contracts were required in 15 states. When researchers tested the exact rules the settlement imposed, in states that had already adopted them, the effect was a rounding error. The Fed described "very small negative effects of just a few basis points, neither of which is statistically distinguishable from zero."

There has been a long, slow drift downward, just not one the settlement caused. The paper concluded that while buy-side commission rates fell from roughly 3% in the 1990s to around 2.7% in the 2020s, there was no evidence that the introduction of buyer agreements contributed to the downward trend; rather, rising home prices and technology improvements were cited as more likely factors.

The logic is simple once you see it. The forces that produced typical commission levels, agent time, transaction complexity, and a seller's incentive to attract a financed buyer, did not change on August 17, 2024. You can read the full Federal Reserve note, Commissions and Omissions: Trends in Real Estate Broker Compensation, for the methodology behind those figures.

Do sellers still pay the buyer's agent?

Mostly, yes. Legally, the seller is no longer required to. Sellers are no longer automatically required to pay the buyer's agent commission. In practice, most keep offering it, because it widens the pool of buyers who can afford the home.

Redfin's agents saw the pattern hold through 2025. In general, sellers are continuing to compensate buyer agents, at least for now, and one Redfin agent said sellers don't seem to have any issue paying a buyer's agent commission. The mechanism is what shifted: instead of a listing broadcasting a fee to every buyer's agent through the MLS, buyer-agent compensation can no longer be advertised on the MLS, and any offer to pay the buyer's agent must now be negotiated directly between the parties, outside the MLS or written into the purchase contract.

There is a real warning inside the "for now." A Redfin agent flagged the risk directly: if the market swings back to rampant bidding wars, sellers may offer low or no commission to the buyer's agent, forcing buyers to bridge the gap, and first-time buyers would be hit hardest. In a soft market, sellers pay to attract you. In a hot one, they may not need to. That is the single biggest variable in your out-of-pocket cost. For the mechanics of who cuts which check at the table, see our breakdown of who pays the Realtor when a home sells.

The real change is by price tier, not by average

The national average is stable because two opposite movements cancel out. Entry-level rates went up. Luxury rates came down.

On lower-priced homes, competition and thin inventory pushed rates higher. For homes priced under $500,000, the average buyer's agent commission ticked up to 2.49% in Q1 2025, compared to 2.42% in Q3 2024. At the top of the market it went the other way. For high-end properties the opposite is true; homes priced at $1 million or more averaged 2.17% for buyer's agents, a modest drop from 2.22% when the new rules were implemented and lower than pre-settlement averages.

That divergence is the story the average buries. Homes under $500K moved with buyer's agent fees rising to 2.52% by Q3 2025, reflecting tighter entry-level inventory and stronger buyer competition in that segment. If you are shopping the starter-home tier, expect the higher end of the range, not the lower.

Commissions on homes between $500,000 and $999,000 inched up from 2.27% in the third quarter of 2024 to 2.29% in the first quarter of 2025, essentially flat. The practical read: the more expensive the home, the more negotiating leverage exists on the fee, both because the dollar figure is large and because flat-fee and discount models compete hardest at the top.

What the buyer representation agreement covers

This is the change you will feel first as a buyer, before you talk price on a single house. Real estate agents who use an MLS are required to enter into written agreements with buyers before touring a home. The agreement is not optional paperwork; it is the gate to seeing homes with an agent.

What has to be in it is specific. Those written agreements must include a specific and conspicuous disclosure of the amount or rate of compensation the real estate agent will receive, or how that amount will be determined. Two guardrails matter. The practice changes do not require an agency agreement or dictate any type of relationship, and the fee itself is not fixed. All commission rates remain fully negotiable and are not set by law.

A few things worth knowing before you sign:

• A long exclusive term with no exit. If the form locks you to one agent for six months across the whole metro, ask to shorten it or limit it to specific homes until you know the agent is a fit.
• A fee higher than any seller is likely to offer. If you agree to 3% but sellers in your market are offering 2.5%, you are on the hook for the gap unless you negotiate it as a credit. Know the local norm first.
• Vague language on who pays. The agreement should state clearly whether you pay the fee, the seller pays, or you cover only a shortfall. "To be determined at closing" is how the old, opaque system worked.

For a section-by-section look at the form and your options to modify it, read our companion piece on what you are signing in a mandatory buyer agency agreement.

Regional variation is real, and larger than the settlement effect

Where you buy still shapes your rate more than the settlement did. The Fed's data drew on a dataset of real estate listings from CoreLogic covering about half of properties listed nationwide from 1995 to 2023, and it showed meaningful state-to-state spread that predates 2024 entirely.

Some states have long run leaner, others richer, driven by home-price levels, competition among brokerages, and local convention. The settlement did not flatten that map. What it changed is that the number is now discussed openly at the start rather than surfacing on a closing statement. A broker put the upside plainly: buyers who used to learn their agent's cut only at closing are now having that conversation before the first tour, and that transparency is genuinely good.

One structural shift worth watching involves new construction and builders. Because compensation now has to be negotiated deal by deal, some buyers might forego working with a broker entirely, and builders will likely take advantage by dealing more directly with buyers and offering incentives to cut out the buyer's agent. If you are touring model homes without your own agent, understand you are unrepresented in that negotiation.

How to negotiate buyer-agent fees now

The settlement handed you one genuinely useful tool: the number is on the table before you tour, in writing, and it is explicitly negotiable. Use it. Here is a practical sequence.

If you are chasing the lowest possible number, understand the tradeoff honestly. Going too low can backfire: industry analysis notes that the pre-negotiation numbers sit right where closed-transaction averages would predict, plus the negotiation gap you'd expect between the offered number and the closed one. A deeply discounted fee can also mean a discounted level of service. If that is the tradeoff you want, our look at 2% commission models lays out what you keep and what you give up.

Frequently asked questions

The honest bottom line

If you came here expecting to hear that the NAR settlement slashed what you pay, the evidence says otherwise. The best independent research available, from the Federal Reserve, found the rules changed transparency far more than price. What you actually gained is leverage you did not have before: a written number, disclosed before you tour, that you are free to negotiate. That is worth using. Learn your market's going rate, cap your exposure to any shortfall, and price the fee against the work. The settlement did not hand you a discount. It handed you the information to earn one.