What the NAR Settlement Really Means for Homeowners

The Billion-Dollar Question Every Homeowner Is Asking

If you bought or sold a home in the past seven years, you might be entitled to money from the largest real estate settlement in American history. The National Association of REALTORS® (NAR) agreed to pay $418 million to resolve antitrust claims related to how buyer-agent compensation was structured and disclosed.

Combined with settlements from major brokerages like Anywhere Real Estate ($83.5 million) and RE/MAX ($55 million), over $1 billion is being distributed to affected homeowners.

But beyond the money, this settlement fundamentally changes how real estate compensation is communicated and structured in America. The old system—where sellers routinely paid both their agent and the buyer's agent through offers of compensation displayed on the Multiple Listing Service—is over. Starting in mid-2024, new rules took effect that require transparency, negotiation, and written agreements before buyers even tour a home.

Understanding what changed, why it matters, and what you can do about it could help you make more informed decisions on your next real estate transaction—or help you claim money you're owed from past deals.

What Was Wrong with the Old System?

For decades, many homeowners didn't fully understand how real estate compensation worked—even though commissions have always been legally negotiable. When you listed your home for sale, your listing agent would often suggest a total commission amount. That commission was then typically split: a portion went to your listing agent's brokerage, and a portion was offered to the buyer's agent's brokerage as a "buyer-broker commission."

Here's what created the legal problems:

Lack of transparency and poor communication. Many buyers didn't realize their agent's compensation was being paid through the seller's proceeds, not directly by them. This created confusion about who the buyer's agent was actually working for and whether the agent had conflicting incentives.

The MLS compensation display requirement. NAR's rules required sellers to publicly advertise on the MLS how much they would pay the buyer's agent. This made it difficult for sellers to exercise their legal right to negotiate different compensation arrangements. It also meant buyer agents could see—and potentially filter by—which homes offered higher compensation, creating steering concerns.

Agents who failed to communicate negotiability. While commissions have always been negotiable by law, many agents didn't effectively communicate this to their clients. Some consumers didn't realize they could negotiate, while others felt pressured to offer specific amounts to ensure their home would be shown.

The Sitzer/Burnett lawsuit, which resulted in a $1.8 billion jury verdict in October 2023, exposed how NAR's rules around compensation offers violated antitrust laws. Plaintiffs argued that requiring sellers to make blanket, publicly-displayed offers of compensation to buyer agents reduced competition and prevented meaningful negotiation. The jury agreed, and the verdict sent shockwaves through the industry.

The Three Big Changes from the NAR Settlement

The NAR settlement, which received final court approval in November 2024, imposed three major rule changes that took effect on August 17, 2024:

1. No More Blanket Commission Offers on the MLS

Previously, Multiple Listing Services (MLSs) required sellers to advertise how much they would pay the buyer's agent. This practice is now prohibited. Sellers can still choose to offer compensation to buyer agents, but they must do so through private negotiations—not as a mandatory, publicly displayed field on the MLS.

This change removes the pressure on sellers to offer a "competitive" buyer-agent commission just to get showings. It also eliminates the steering problem, where buyer agents would filter search results to show only homes offering higher commissions.

2. Written Buyer-Broker Agreements Are Now Mandatory

Before August 17, 2024, many buyers toured homes and made offers without ever signing a formal agreement with their agent. The new rules require written buyer-broker agreements before an agent can show a home. These agreements must clearly state:

• How much the buyer will pay their agent (as a percentage or flat fee)

• What services the agent will provide

• How long the agreement lasts

• Whether the buyer can cancel and under what terms

This transparency forces buyers to negotiate their agent's fee upfront, just like they would with any other professional service. It also ensures buyers understand exactly what they're paying for.

3. Sellers No Longer Automatically Pay Buyer-Agent Commissions

Under the old system, sellers paid both agents' commissions as a condition of listing on the MLS. Now, buyers are responsible for negotiating and paying their own agent's fee—unless the seller voluntarily agrees to cover it as part of the purchase negotiation.

In practice, this means buyers can shop around for agents offering competitive rates, and sellers can list their homes without committing to pay a buyer agent they've never met. If a seller wants to attract more buyers, they can still offer to pay the buyer's agent fee, but it's no longer mandatory or advertised on the MLS.

What This Means for Homebuyers

If you're planning to buy a home, the new rules give you more control—but also more responsibility. Here's what you need to know:

You must negotiate your agent's fee before touring homes. This might feel awkward at first, but it's no different than negotiating with a lawyer, accountant, or contractor. Ask multiple agents what they charge and what services they provide. Fees may be a percentage of the purchase price, but some agents now offer flat fees or hourly rates.

You can ask the seller to cover your agent's fee. Just because you're responsible for paying your agent doesn't mean you have to pay out of pocket. You can include a request for the seller to pay your agent's fee as part of your purchase offer. Many sellers will agree, especially in competitive markets where they want to attract buyers.

You can negotiate lower fees. In the past, buyer-agent commissions were effectively fixed at 2.5% to 3% because that's what sellers offered on the MLS. Now, you can negotiate directly with your agent. If you're buying a high-priced home or don't need full-service representation, you might negotiate a lower percentage or a flat fee.

You can cancel your agreement if it's not working. The new buyer-broker agreements must include cancellation terms. If your agent isn't meeting your needs, you're not stuck with them for months. Read the cancellation clause carefully before signing.

What This Means for Home Sellers

If you're selling a home, the new rules give you more flexibility and potentially lower costs:

You're no longer required to offer a buyer-agent commission. You can list your home on the MLS without committing to pay a buyer's agent. This could save you 2% to 3% of your sale price—potentially tens of thousands of dollars on a typical home.

You can still offer to pay the buyer's agent if you want. If you're in a slow market or want to attract more buyers, you can voluntarily offer to cover the buyer's agent fee. You just can't advertise it on the MLS. Instead, you'll negotiate it directly with the buyer or include it in your listing description outside the MLS.

You'll have more negotiating power with your listing agent. Because you're no longer required to pay a buyer-agent commission, your listing agent can't justify a 5% to 6% total commission as easily. You can negotiate a lower listing-agent fee (typically 2% to 3%) and decide separately whether to offer buyer-agent compensation.

Are You Eligible for Settlement Money?

If you bought or sold a home between specific dates, you might be part of the settlement class and eligible for compensation. Here's how it works:

NAR Settlement: If you sold a home listed on an NAR-affiliated MLS between March 2015 and August 2024, and paid a commission that included a buyer-agent fee, you're likely part of the class. The $418 million settlement fund will be distributed to eligible sellers based on the commissions they paid. Claims must be submitted by a deadline (typically within 90 to 180 days of final approval).

Brokerage Settlements: Separate settlements with Anywhere Real Estate, RE/MAX, Keller Williams, and other brokerages cover buyers and sellers who transacted with those companies during specific periods. Each settlement has its own eligibility criteria and claim process.

How to Check: Visit the official settlement websites (such as realestatecommissionlitigation.com) to see if you're eligible and how to file a claim. You'll need documentation of your transaction, including your closing statement showing the commission paid.

How Much You'll Get: Settlement payouts depend on how many people file claims and how much commission you paid. Early estimates suggest individual payouts could range from a few hundred dollars to several thousand for high-value transactions.

The Bigger Picture: What Happens Next

The NAR settlement is just the beginning. Several other lawsuits are still pending, including cases targeting specific brokerages, MLS systems, and tech platforms like Zillow. These cases could result in additional settlements and further changes to industry practices.

Meanwhile, the industry is adapting. Some agents are switching to flat-fee or hourly billing models. Others are unbundling services, allowing buyers and sellers to pay only for the specific help they need. Discount brokerages and tech-enabled platforms are gaining market share as consumers shop for lower-cost alternatives.

The biggest question is whether these changes will actually lower costs for consumers. Early data is mixed. Some buyers are negotiating lower agent fees, while others are finding that sellers are less willing to cover buyer-agent costs, forcing buyers to pay out of pocket. In competitive markets, sellers who offer to pay buyer-agent fees may still have an advantage in attracting offers.

What You Should Do Right Now

Whether you're buying, selling, or just staying informed, here are three action steps:

1. Check if you're eligible for settlement money. If you bought or sold a home in the past decade, spend 10 minutes checking the settlement websites. You might be owed money, and filing a claim is usually free and straightforward.

2. Educate yourself before your next transaction. If you're planning to buy or sell, understand the new rules before you sign anything. Ask agents how they charge, what services they provide, and what your options are. Don't assume the old 5% to 6% commission is still the norm.

3. Negotiate everything. Commissions are no longer fixed or non-negotiable. Whether you're hiring a listing agent or a buyer's agent, treat it like any other professional service: get quotes, compare options, and negotiate the best deal.

The real estate industry is undergoing its biggest transformation in decades. Those who understand the new rules—and use them to their advantage—will save money and get better service. Those who don't will continue overpaying for a system that no longer exists. ~ Frances Flynn Thorsen

DISCLOSURE: There is no standard, fixed, or required commission rate in real estate. All commission rates are fully negotiable — by law and in practice. Any commission figures, percentages, or fee structures referenced in this article or elsewhere in this publication are used strictly for illustrative purposes and should not be interpreted as typical, customary, recommended, or representative of what any buyer or seller should expect to pay. Consumers always have the right to negotiate the terms of any compensation arrangement with their agent or brokerage.