The real estate world is undergoing a significant transformation. Sparked by high-profile lawsuits against the National Association of Realtors® (NAR) and resulting settlements, the way real estate professionals disclose, negotiate, and receive compensation is evolving fast. In this post, we break down the most important changes through a practical, Q&A format to help buyers and agents stay informed and empowered.
Q: What are the NAR lawsuits about?
A: The NAR lawsuit refers to a series of antitrust cases (most notably Burnett v. National Association of Realtors) that challenged long-standing practices in how real estate agent commissions are structured. Plaintiffs alleged that NAR conspired to inflate buyer agent commissions by requiring sellers to offer compensation to buyer’s agents via the Multiple Listing Service (MLS). This practice, they argued, stifled competition and kept commission rates artificially high.
Facing mounting legal pressure, NAR agreed to a $418 million settlement in March 2024. The settlement also includes significant policy changes that are set to reshape how agents are compensated and how listings are handled.
It is important to note that the NAR lawsuits only effect residential real estate commissions (not commercial real estate).
Q: What was the outcome of the lawsuits?
A: While the lawsuit originated in Missouri, the settlement is national in scope and impacts NAR members and affiliated brokerages across the U.S. In 2024, NAR reached a $418 million settlement and agreed to change policies, including two key changes:
Prohibiting the display of buyer agent compensation on the MLS, and
Requiring written buyer-broker agreements before touring a home with an agent.
The rule changes took effect August 2024 and were intended to promote competition, transparency, and consumer choice.
Q: Does this mean buyer agents won’t get paid anymore?
A: No. Buyer agents can still be compensated — either by the buyer directly or by the seller, just not via offers listed on the MLS. How and by whom the buyer agent is paid must now be clarified up front, through a written agreement.
Q: Will this change how much buyers or sellers pay?
A: Possibly. The marketplace may see more negotiated commissions and a wider range of fee structures, such as flat fees or hourly rates. While some buyers may now pay their agents directly, others may negotiate for sellers to cover part or all of that cost — but those negotiations must occur outside of the MLS.
FAQs About the New Rule Changes for Agents and Buyers
Q: What is the new rule about written buyer agreements?
A: Buyers must now sign a written agreement with their agent before viewing properties with the agent. This agreement must:
1. Disclose the Compensation Amount or Calculation Method: The agreement must say exactly what the agent will earn or how it will be calculated.
Explanation: Buyer representation agreements must clearly state the specific amount or rate of compensation the agent will receive — or spell out how it will be determined (e.g., flat fee, hourly rate, percentage of purchase price). This ensures buyers understand the financial terms of the relationship up front.
2. No Open-Ended Compensation: Vague language like “whatever the seller offers” is not allowed.
Explanation: The compensation must be objectively ascertainable — meaning it must be definite and measurable. Agents cannot use ambiguous or open-ended terms such as “buyer’s broker compensation shall be whatever amount the seller offers.” This prevents confusion and protects buyers from unexpected costs.
3. Limit Compensation to What’s in the Agreement: Agents can’t accept more than what the buyer agreed to in writing.
Explanation: The agreement must state that the agent may not receive compensation from any source that exceeds the amount or rate agreed upon with the buyer. This limits potential conflicts of interest and keeps the buyer’s best interests front and center.
4. Disclose That Commissions Are Negotiable: The agreement must say commissions are not set by law.
Explanation: It must include clear, prominent language stating that real estate commissions are fully negotiable and not established by law. This protects consumer choice and reinforces that pricing is flexible and subject to agreement between the parties.
5. Comply with Applicable Laws: Include anything else required by state or federal law.
Explanation: The agreement must also incorporate any additional provisions required under local, state, or federal regulations, which may vary by jurisdiction.
Q: Can sellers still offer compensation to buyer agents?
A: Yes, but any offers must be communicatedoff the MLS. Sellers, in consultation with their listing agents, may still choose to incentivize buyer representation through compensation, but those offers must be made directly to buyer agents or via separate marketing channels.
Q: How should agents talk to buyers about these changes?
A: Agents should be transparent and proactive. These conversations should cover:
How the agent adds value in the transaction,
What the buyer agreement entails,
How compensation will work, and
Whether the buyer or seller will ultimately be responsible for payment.
This is an opportunity to build trust and differentiate based on service and professionalism.
Q: How do these changes benefit buyers and sellers?
A: These changes are intended to promote clarity, competition, and consumer choice:
In theory, buyers now know exactly what services they’re getting and at what cost.
Sellers are no longer expected to offer blanket compensation via MLS.
Both parties have more room to negotiate fee structures that align with their goals.
Q: Will these changes impact home affordability?
A: It’s too early to tell definitively, but the goal of the reforms is to create a more competitive marketplace, potentially lowering overall transaction costs. However, the real impact may vary depending on local practices, market conditions, and how buyers and sellers respond.
The Bottom Line
The NAR lawsuits and resulting rule changes mark a turning point in U.S. real estate — one that centers on transparency, consumer choice, and competition. While the transition may require agents and clients alike to adjust how they think about compensation and representation, these updates ultimately aim to create a more professional, equitable market.
Agents who embrace these changes as an opportunity to educate and advocate will be best positioned to build lasting relationships in this new environment.
Have questions about how the NAR lawsuits or MLS commission changes affect your real estate transactions?
Contact Hunter Law Group today for guidance and representation. Our Kansas City team helps buyers, sellers and agents navigate these changes confidently and protect their interests.