NAR Settlement Impact: How Commission Rules Changed
The 2024 National Association of Realtors settlement fundamentally changed how real estate commissions work in America. Here is what changed, what it means for sellers, and how to navigate the new landscape.
What Changed
The key provisions of the settlement include:
Key Change
No More MLS Offers
Sellers no longer pre-commit to buyer agent compensation through the MLS
Before the Settlement
- Listing agents set the buyer's agent commission in the MLS
- Sellers were expected to pay both sides (5-6% total)
- Commission rates were effectively standardized
After the Settlement
- Buyer's agent compensation cannot be listed on the MLS
- Buyers must sign representation agreements specifying their agent's compensation
- Sellers can choose to offer buyer's agent compensation, but it is not automatic
- Commission rates are more openly negotiable
Impact on Sellers
The settlement has created both opportunities and challenges:
Benefits: More control over commission expenses, ability to negotiate each component separately, and increased competition among agents.
Challenges: Some buyer's agents may steer clients away from homes that do not offer compensation, creating potential showing disparity.
What Sellers Should Do
- Understand that all commissions are negotiable
- Decide on buyer's agent compensation strategically based on your market
- Interview multiple agents and compare commission proposals
- Consider alternative selling methods that may now be more competitive
The Bottom Line
The NAR settlement has given sellers more power over commission costs. Average total commissions have dropped from 5.5-6% to 4.5-5.5%, saving sellers thousands. Use our calculator to see how different commission structures affect your net proceeds.