Real Estate Commission Rule Changes Explained: What the 2024 Settlement Means for Owners

This guide is for home sellers, especially those selling by owner, and for buyers trying to understand how agent pay works now. After reading it, you’ll know what actually changed in August 2024, what didn’t, and how to run the commission math so you can negotiate from a position of strength.

What happened: the lawsuits and the settlement

For decades, a typical listing worked like this: the seller signed with a listing agent, agreed to a total commission, and the listing agent posted an offer on the local multiple listing service (MLS) to share part of it with whichever agent brought the buyer. Home sellers sued, arguing that NAR rules requiring those blanket offers kept commissions high.

In October 2023, a federal jury in Missouri sided with the sellers in one of those cases and awarded about $1.78 billion in damages. In March 2024, the National Association of Realtors (NAR) announced a nationwide settlement resolving claims by home sellers. NAR agreed to pay $418 million over roughly four years and to change several practice rules, while denying wrongdoing. The court granted final approval in November 2024.

The practice changes took effect on August 17, 2024. They apply to NAR members and to MLS participants.

The two practice changes that matter most

No offers of buyer-agent compensation on the MLS

MLS listings can no longer include offers of compensation to buyers’ agents. That means no compensation field and no mention in the remarks or attachments. The MLS still shows the home, its price, and its details; it just no longer advertises what the seller will pay the buyer’s agent.

Two things remain allowed:

• Off-MLS offers. A seller can still agree to pay a buyer’s agent, and agents can discuss it through phone calls, email, brokerage websites, or the purchase contract.
• Buyer concessions. A seller can still offer concessions to buyers on the MLS, such as a credit toward closing costs, as long as it isn’t conditioned on the buyer using an agent.

Written agreements before touring

Agents who are MLS participants and work with buyers must have a written agreement with the buyer before touring a home, whether in person or by live virtual tour. The agreement must:

• state the amount or rate of the agent’s compensation, or how it will be calculated, in a specific, objectively ascertainable way rather than an open-ended one
• prohibit the agent from receiving more compensation, from any source, than the agreement allows
• include a conspicuous statement that broker fees are not set by law and are fully negotiable

You don’t need an agreement to walk into an open house on your own, or to ask an agent about their services.

Before and after at a glance

What did not change

Some headlines left the impression that commissions were cut in half or that sellers can no longer pay buyers’ agents. Neither is true.

• Commissions were always negotiable. No law sets them, and the settlement didn’t either.
• Sellers can still pay buyers’ agents. It’s now a negotiated term rather than a pre-set offer on the MLS.
• Buyers can still work with agents or go without one. Many by-owner buyers negotiate directly with the seller and hire an attorney or title company for the closing.
• Owners selling on their own aren’t bound by NAR rules directly. The rules reach you mainly through the MLS, if you choose to list there through a flat-fee service.

Related lawsuits and MLS policy updates have continued since 2024, so check the current rules of any MLS you list in.

What it means for by-owner sellers

You now negotiate buyer-agent pay in the open, deal by deal, instead of announcing it in advance. That’s an opportunity if you prepare.

1. Decide your policy before you list. Will you pay a buyer’s agent nothing, a set amount, or consider requests case by case? Write it down so you answer consistently.
2. Keep compensation out of the MLS. If you use a flat-fee MLS listing, say nothing about buyer-agent pay there. Our guide to flat-fee MLS explains how those listings work.
3. State your position elsewhere. On your own listing page or when an agent calls, you can say you’ll consider buyer-agent compensation as part of an offer.
4. Expect requests in offers. Many represented buyers will ask you to cover some or all of their agent’s fee. Treat it like any other price term.
5. Compare offers by net. A higher offer that asks you to pay the buyer’s agent may net you less than a lower, clean offer.
6. Welcome unrepresented buyers. They may have no agent fee at all; both of you should still use a title company or attorney.

What to say when a buyer’s agent calls

Agents will ask, “What are you offering the buyer’s side?” A clear, consistent answer keeps you in control. For example: “I’m not offering compensation up front. If your buyer wants me to cover part of your fee, include it in the offer and I’ll weigh it with price, terms, and closing date.” That tells the agent you’ll engage, without committing money before you see an offer. If you’ve decided on a set amount, state it the same way to every agent and confirm it in writing in the purchase contract, not on the MLS.

What it means for buyers

If you tour with an agent, read the buyer agreement before you sign it. Look at the compensation amount, how long the agreement lasts, whether it’s exclusive, and how you can end it. All of those terms are negotiable.

Before signing, ask the agent:

• Is your fee a flat amount or a percentage, and is it the same no matter the price?
• If the seller pays part of your fee, does what I owe drop by that amount?
• How long does the agreement last, and how can I cancel it?
• Is it exclusive, and does it cover only certain areas or property types?
• Does it apply if I buy a by-owner home I find on my own?

If a seller won’t pay your agent, your agreement determines what you owe, so you may ask the seller for a concession or price adjustment in your offer. You can also skip agents entirely by touring for-sale-by-owner homes directly with owners; see how to buy a house directly from the owner.

Worked commission math

Here’s how the numbers play out on an illustrative $450,000 sale.

• Seller pays both agents 5.5% total: $24,750.
• Seller pays only a 2.5% listing commission; buyer covers their own agent: $11,250.
• By-owner sale with a flat-fee MLS listing (assume $400) and a 2% buyer-agent fee granted in negotiation: $400 + $9,000 = $9,400.
• By-owner sale to an unrepresented buyer: $0 in commission. You still pay normal closing costs.

Now compare two offers on the same home:

• Offer A: $455,000, asking you to pay the buyer’s agent 2.5% ($11,375). You net $443,625 before other costs.
• Offer B: $445,000 with no compensation request. You net $445,000.

Offer B, the lower price, leaves you $1,375 richer, and it only needs to appraise at $445,000. Our commission savings calculator runs these comparisons for your price.

Whatever you pay in commissions, including a buyer-agent fee you agree to, is a selling expense that reduces your amount realized and your taxable gain under IRS rules.

Common misconceptions

• “Commissions are now fixed at a lower rate.” No rate was set. Every fee is negotiated.
• “Sellers are banned from paying buyers’ agents.” They aren’t. The offer just can’t appear on the MLS.
• “Buyers must always pay their own agent now.” Who pays is negotiated in each deal.
• “A buyer agreement locks you in for a year.” Length, exclusivity, and cancellation are all negotiable terms.

Rules vary by MLS and state, so confirm local requirements with a real estate attorney before signing a listing or buyer agreement.

Next steps

• Compare scenarios with the commission savings calculator.
• Learn how to handle buyer-agent requests in negotiating offers without an agent.
• Read flat-fee MLS explained before you choose a listing service.
• Ready to sell? List your home free.

Frequently asked questions

Sources

1. National Association of Realtors, Facts About the NAR Settlement
2. National Association of Realtors, The Facts: Settlement Information for Consumers and Members
3. IRS Publication 523, Selling Your Home