Navigating New Changes in Real Estate Commissions: What You Need to Know 

The National Association of Realtors (NAR) recently announced a significant settlement relating to how broker commissions are handled, shedding light on a complex aspect of real estate transactions that affects both buyers and sellers. This post aims to clarify the recent changes following a $418 million settlement agreement reached on March 15, 2024, which is still pending court approval. 

Understanding the Settlement 

The settlement stems from antitrust class action lawsuits, specifically Sitzer/Burnett and Moehrl cases, which accused NAR of conspiring to require home sellers to pay inflated commissions to brokers representing buyers. These cases argued that NAR enforced a rule requiring brokers to advertise unilateral offers of commission to buyer’s agents via their MLS (Multiple Listing Service), which was seen as a form of price fixing. 

NAR disputes these claims, asserting that commissions have always been negotiable and will continue to be so. The settlement was agreed upon to eliminate uncertainties plaguing the industry amidst challenges like low inventory and rising interest rates. It’s crucial to note that the settlement does not encompass all brokerages or MLS systems, especially those with a transaction volume in 2022 that exceeded $2 billion. 

Major Changes Post-Settlement 

Starting mid-July 2024, listing brokers will no longer be allowed to include blanket offers of compensation to buyer’s agents on the MLS. However, this does not eliminate the option for cooperative compensation; it simply means that such offers must occur off of the MLS. Buyers and their agents can now negotiate commission directly, ensuring transparency and potentially leading to more personalized agreements. 

Furthermore, NAR will require that a buyer representation agreement is signed between the buyer and the buyer’s agent. This agreement will detail the commission structure, whether it’s a fixed price or a percentage of the purchase price, enhancing clarity for all parties involved. 

The Importance of Transparency and Best Practices 

Transparency remains a cornerstone of these new regulations. Real estate agents are encouraged to be upfront about how commissions are handled, ensuring that buyers are well-informed about the financial aspects of their transactions. Here are some recommended best practices for agents: 

  • Educate Buyers: Clearly explain the commission structure and its implications on their real estate transaction. 
  • Clarify Roles and Responsibilities: Distinguish between the roles of the listing and buyer’s agents. 
  • Negotiation Opportunities: Discuss how and when commissions might be negotiated. 
  • Document Agreements: Use detailed written agreements, like the buyer’s representation agreement, to document all terms clearly. 

Challenges and Considerations 

The settlement has sparked concerns among various stakeholders in the real estate market. Organizations like The Community Home Lenders of America (CHLA) have expressed worries that the new commission structures could disadvantage certain buyers, including veterans and lower-income families, particularly those relying on federal mortgage programs like VA and FHA loans. 


As these changes unfold, it’s vital for both real estate professionals and consumers to stay informed and adaptable. The landscape of buying and selling homes is evolving, and understanding these developments can help ensure smoother transactions and fairer outcomes for all parties involved. 

For those navigating this new terrain, consulting with knowledgeable real estate attorneys or trusted professionals can provide additional guidance and support, ensuring that everyone’s interests are protected in this dynamic market. 

If you are looking for assistance navigating the world of real estate commissions, consider consulting a legal professional to help protect your interests. If you’re in need of assistance, please contact Krista M. Kochoksy, Partner and Chair of the Real Estate Practice Group at The Lynch Law Group by emailing her at  

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