If you’ve bought or sold a home recently, you may have noticed changes. The way real estate agents get paid has shifted dramatically after the National Association of Realtors (NAR) settlement in 2024.
The old system: seller’s agent offered a commission (usually 2.5‑3%) to the buyer’s agent, listed on the MLS. The buyer paid nothing directly.
The new system (as of August 2024): Commissions are no longer listed on the MLS. Buyer’s agents must have a signed agreement with buyers before showing homes. And commissions are now fully negotiable – with more transparency.
This guide explains exactly what changed, how it affects you as a buyer or seller, and how to navigate commissions in 2025‑2026.
The Old System (Pre‑August 2024)
How it worked:
- Seller agreed to pay a total commission (e.g., 6%) to their listing agent.
- Listing agent offered a “co‑op commission” (e.g., 3%) to any buyer’s agent who brought a buyer.
- That co‑op offer was published in the MLS.
- Buyer’s agent showed homes knowing they’d get paid by the seller.
- Buyer paid nothing directly.
Criticism: The system was not transparent. Buyers didn’t know their agent was being paid by the seller. And sellers felt pressured to offer a “standard” 3% to attract buyer’s agents.
The NAR Settlement – What Changed
In March 2024, NAR agreed to settle class‑action lawsuits by paying $418 million and changing its rules.
Effective August 17, 2024:
Change #1 – No more commission offers on MLS
The MLS can no longer display any offer of compensation to buyer’s agents. Sellers can still offer commissions, but they must be communicated off‑MLS (e.g., directly to buyer’s agents or via written agreements).
Change #2 – Buyer’s agency agreement required before touring
Buyers must sign a written agreement with their agent before the agent can show them a home. The agreement must specify:
- The commission amount or rate
- How the agent will be paid (by seller, by buyer, or both)
- That the fee is negotiable
Change #3 – No more “blanket” offers
Buyer’s agents can no longer rely on a standing MLS offer. They must negotiate commission per transaction or have a signed agreement with the buyer that covers the gap if the seller offers less.
How Commissions Work Now (2025‑2026)
Despite the changes, most transactions still look similar – but with more paperwork.
Scenario A – Seller offers a commission (most common):
- Seller agrees to pay their listing agent a total commission (e.g., 5%).
- Listing agent tells buyer’s agents (via phone, email, or showing instructions) that they’ll pay 2.5% to the buyer’s agent.
- Buyer’s agent has a signed agreement with buyer stating: “I will be paid 2.5% of purchase price, typically by seller. If seller pays less, buyer makes up the difference.”
- At closing, seller pays both agents.
Scenario B – Seller offers no commission:
- Seller pays only their listing agent (e.g., 2.5%).
- Buyer’s agent’s agreement says: “Buyer will pay 2.5% commission.”
- Buyer pays their agent directly at closing (often rolled into loan or paid with other closing costs).
Scenario C – Buyer pays all:
Rare. Only in very hot seller’s markets where buyers compete.
Result for most buyers: Nothing changes. Sellers still pay buyer’s agent commissions in the vast majority of transactions. The difference is now it’s disclosed in writing upfront.
What This Means for Home Buyers
You must sign an agreement before seeing homes. Don’t panic – it’s standard.
What to look for in a buyer’s agency agreement:
- Commission amount – Should be negotiable. Typical is 2.5‑3%.
- “Seller‑paid” language – Look for: “Agent will first seek payment from seller or seller’s agent. Buyer is responsible only if seller pays less than agreed amount.”
- Term length – Some agreements are for one day, one property, or 3‑6 months. Prefer shorter terms (e.g., per property or 30 days).
- Termination clause – You should be able to cancel in writing.
What if the seller offers less than your agreement? Example: Your agreement says 2.5%. Seller offers only 2%. You pay the 0.5% difference. That’s why you negotiate the agreement amount – don’t agree to 3% if market average is 2.5%.
Can you negotiate the commission with your agent? Yes. Ask for 2% or a flat fee. Many agents will accept, especially on higher‑priced homes.
What This Means for Home Sellers
You no longer have to publish a buyer’s agent commission on the MLS. But you still can (and should) offer one – just communicate it off‑MLS.
Why offer a buyer’s agent commission? Because most buyer’s agents will show homes where they know they’ll get paid. If you offer zero, buyer’s agents will tell their clients: “You’ll have to pay my fee out of pocket.” That may reduce showings.
What’s a typical buyer’s agent commission in 2026? Still 2.5‑3% in most markets, but trending down. Many sellers offer 2% or 2.25% for higher‑priced homes.
Can you offer different amounts to different buyer’s agents? Yes. You could offer 2.5% to agents from large firms and 2% to discount brokers. But that’s complicated and may create legal risk (fair housing?). Safer to offer a single amount to all.
Strategy: Offer 2.5% buyer’s agent commission. Negotiate your listing agent down to 2‑2.5%. Total commission 4.5‑5%.
How Countrywide Collective Handles Commissions
At Countrywide Collective, we believe in transparency and choice.
For sellers:
- We offer full‑service listing at 2.5% (negotiable).
- You choose the buyer’s agent commission (2‑3%). We advise based on your local market.
- No hidden fees. You know exactly what you’ll pay at closing.
For buyers:
- We sign a buyer’s agency agreement that clearly states: “Agent will be paid by seller or seller’s agent in virtually all cases. Buyer pays only if seller offers less.”
- If seller offers less than our agreed amount, we discuss options: negotiate with seller, buyer pays difference, or we reduce our fee.
- We never pressure buyers into paying out‑of‑pocket commissions.
Frequently Asked Questions
Q: Do I have to pay my buyer’s agent now?
A: In most cases, no – the seller still pays. But you sign an agreement that makes you responsible if the seller pays less. In practice, sellers almost always pay.
Q: Can I buy a home without an agent?
A: Yes. You can deal directly with the listing agent (dual agency) or with the seller directly (for sale by owner). But you lose representation.
Q: Are commissions higher now?
A: No. They are slightly lower because of increased negotiation and discount brokers. Average total commission has dropped from 5.8% to 5.3% since the settlement.
Q: What if I already signed a buyer’s agency agreement with a high commission?
A: You can ask to amend it. Most agents will renegotiate rather than lose a client.
Q: Does the settlement affect rentals?
A: No. Rental commissions are not covered.
Tips for Negotiating Commissions in 2026
For sellers:
- Interview 3‑4 agents. Ask: “What’s your total commission, and how much goes to buyer’s agent?”
- Offer 4.5‑5% total (e.g., 2.5% listing + 2% buyer’s). Test if agents accept.
- If your home is over $500k, push for 4% total (2% + 2%).
For buyers:
- Before signing, ask: “What’s your typical commission? Is it negotiable?”
- Offer 2% or 2.25% instead of 2.5‑3%. Many agents will accept, especially for repeat clients.
- If the seller offers less, ask your agent to reduce their fee to match.
Conclusion
The NAR settlement didn’t end commissions – it made them more transparent and negotiable. Sellers still typically pay buyer’s agent commissions. Buyers now sign agreements upfront. And everyone can negotiate.
Your next step: Whether buying or selling, always ask for a clear, written explanation of who pays what. And don’t be afraid to negotiate.
Ready to buy or sell with transparent, fair commissions? Countrywide Collective offers clear pricing and no surprises. Contact us today.
