What Changed: No MLS Commission Offers, Separate Negotiation

Before the settlement, seller-paid buyer agent commissions were listed on the MLS as part of the listing. Now, buyer agent compensation cannot be advertised on the MLS. Sellers can still offer to pay the buyer's agent, but it must be negotiated outside the MLS, typically through the listing agreement or separate negotiation with the buyer.

What Did Not Change: Agents Still Work for Buyers and Sellers

The NAR settlement does not change the fundamental roles of real estate agents. Buyers still need representation, and buyer's agents still negotiate on their behalf. The settlement changes how commissions are communicated and negotiated, but it does not eliminate the buyer agent role or the value they provide to homebuyers.

How It Affects Sellers: More Negotiation, Potentially Lower Commissions

Sellers now have more flexibility in how they structure commissions. You may choose to offer buyer agent compensation directly (through the listing agreement or buyer agreement), negotiate it as a seller concession, or have the buyer pay their own agent. This could potentially lower your total commission costs, but it also adds complexity to the negotiation.

How It Affects Buyers: May Need to Pay Their Agent Directly

Buyers now sign a buyer representation agreement that specifies how their agent will be compensated. If the seller does not offer to pay the buyer's agent, the buyer may need to pay their agent directly. This could affect the buyer's ability to purchase or influence what they can offer on a home. Buyers should discuss this with their agent before making an offer.

Strategies for Sellers

As a seller, you have several options. You can offer buyer agent compensation as part of your listing agreement (most common and attractive to buyers). You can offer it as a concession negotiated in the offer. You can choose not to offer it and have buyers pay their own agent (may reduce buyer interest). Discuss the best strategy with your agent based on your local market conditions.

Strategies for Buyers

Buyers should ask their agent upfront about how they will be compensated. If the seller does not offer buyer agent compensation, the buyer may need to pay it out of pocket or request it as a seller concession. Buyers should factor this cost into their budget and discuss options with their agent before making offers.