Understanding the NAR Settlement: What Buyers & Sellers Need to Know
- David Myer
- Dec 15, 2025
- 5 min read
The real estate landscape changed significantly after the 2024 NAR settlement. While the headlines focused on lawsuits and commissions, the practical impact on day-to-day transactions is much more nuanced, and, frankly, many REALTORS® are still not explaining these changes clearly to their clients.
Both buyers and sellers now face new responsibilities, new disclosures, and new negotiation dynamics. Whether you’re navigating a traditional sale, a divorce sale, or representing clients as an attorney, understanding these changes is critical to protecting your clients’ interests.
This post breaks down the real-world implications in plain English.
1. Written Buyer Agreements Are Now Mandatory Before Touring a Home
One of the most significant changes, and one that many buyers still have not been told (or told well), is that a written buyer agreement is now required before a REALTOR®(other than the listing agent) may conduct any home tour, including virtual tours.This rule applies nationwide and.
What this means for buyers
You must sign a written agreement with your agent before seeing a home with a REALTOR®
The agreement must clearly state:
How your agent will be paid
The exact amount or formula for compensation (typically a % of the purchase price, but some offer flat fees)
That real estate compensation is fully negotiable and not set by law
Many buyers are surprised by this step, especially those who have purchased homes before, because this was not previously required.
The only exception to this, is if you are attending an open house, or if you are shown the property by the listing agent, who is showing the property as part of their duties to the sellers as their representative.
What this means for sellers
Buyers touring your home will already be under a written agreement with their broker.
That agreement may specify certain compensation terms, which can influence how a buyer structures their offer.
In short, compensation discussions happen earlier in the process and are more transparent.
2. Offers of Compensation Can No Longer Be Shown on the MLS
Until now, MLS listings commonly displayed the amount being offered towards a buyer-agent commission.This is no longer allowed.
Sellers still can offer compensation to a buyer’s agent, but:
It must be communicated off-MLS
A seller must give written approval for any payment made to a buyer’s agent (typically agreed upon and written into the Purchase and Sales or Offer to Purchase).
Concessions (like closing cost credits) can still appear on the MLS
Your agent can still call the list agent and ask what compensation is being offered (if any)
Impact on sellers
You still have full control over whether you offer buyer-agent compensation.
Offering compensation can increase the size of your buyer pool, especially for first-time and low-down-payment buyers.NAR explicitly states this remains beneficial to many consumers.
Impact on buyers
You’ll now see MLS listings without any buyer-agent compensation listed.
Your agent will explain how to approach compensation depending on the listing:
Ask the seller to contribute
Request concessions
Pay your agent directly
Or negotiate for the listing agent to compensate your agent as part of your offer.
3. Compensation Is Fully Negotiable; and Sellers Still Have Strategic Reasons to Offer It
The settlement did not eliminate cooperative compensation.It simply changed how it is communicated and documented.
Why sellers may still choose to offer compensation
NAR states that seller-paid buyer-agent compensation often:
Helps buyers reduce upfront costs
Increases access for underserved and first-time buyers
Expands the buyer pool
Improves the odds of maximizing the sale price
For higher-conflict or time-sensitive cases (such as many divorce sales), increasing buyer accessibility can meaningfully reduce days on market and sale complications.
Why buyers should understand this
Even though compensation is no longer displayed in MLS data, buyers can still:
Negotiate for the seller to cover their agent fees
Request concessions
Structure compensation into their offer
What’s no longer allowed is vague or open-ended compensation language. Agreements must be exact and transparent.
4. The Big Gap: What Many REALTORS® Are Still Not Explaining
While the rules are clear, the industry communication has not been.
Here are the most common misunderstandings buyers and sellers are facing:
Misunderstanding #1: “Buyer agents now work for free.”
Incorrect. Buyers agents have never worked for free, and even more importantly, now that commission is (and always has been) negotiable. This is why it is important the buyers have already reviewed and signed their agreement with their agent before making offers to fully understand they are responsible for that fee in the event it is not being offered by the sellers.
Misunderstanding #2: “Sellers can’t pay buyer agents anymore.”
Also incorrect. Sellers can pay for buyer agent compensation, they just can't advertise it on the MLS. Any buyer agent commission paid by the sellers is agreed upon in a purchase and sales or offer to purchase.
Misunderstanding #3: “Buyers must pay their agent out of pocket.”
Not necessarily. Seller concessions, negotiated compensation, or listing-agent contributions are still allowed. The biggest thing the industry does not illustrate well, is that the buyer is always paying their agent, if they are paying them directly(out of pocket), that payment is made now and reflected in your total cash to close. If the seller is paying the buyer agent compensation, the buyer (if financing) is paying their agent fee over the life of the loan as part of their payment.
Misunderstanding #4: “The settlement reduced commission amounts.”
It didn’t. Commissions were always negotiable, and they still are.
Most buyers and sellers are not hearing accurate explanations because many agents are struggling to interpret the new requirements themselves. Just like any industry, there are agents working for lower fees, and their are agents working for higher fees. At the end of the day you need to evaluate what value your agent is providing to you, and if that value matches the fee they are charging. If not, negotiate with them before signing, or find another agent that suits your needs better.
Conclusion
The post-settlement environment adds new layers of documentation, negotiation, and responsibility for both buyers and sellers. The rules are different now, not necessarily harder, but far less forgiving of misunderstanding.
The key takeaway:Transparency is higher, choices are broader, and proper guidance matters more than ever.
It has provided our team an excellent opportunity to have full discussions about this matter durring our consultations with customers to make sure they are fully informed and understanding the costs before we even begin.
If you’re navigating a home sale or purchase, we are always open to have a full and transparent conversation about what the costs to you will be.
If you would like to see the full FAQ article provided by the National Association of REALTORS® you can read it here.
Written by: David Myer -REALTOR® 603-554-7617
Licensed in NH & MA
Aimpoint Realty Group-Keller Williams Metropolitan
168 South River Rd Bedford NH 03110 o:603.232.8282
Each office is independently owned and operated
This article is for general informational purposes only and is not legal advice. Every situation is unique. Please consult your attorney for guidance specific to your case. For questions related to the real estate component, I’m available for consultation.
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