Your Right to Negotiate Real Estate Commissions Just Became Real. Here's How to Use It.

What the Settlement Actually Did

In plain terms, the National Association of Realtors (NAR) settlement ended a federal lawsuit brought by Missouri home sellers who argued that the way real estate commissions were disclosed and negotiated was anticompetitive.^[1] The settlement, announced March 15, 2024 and approved at $418 million, did not admit wrongdoing. But it did require NAR to change how the industry works.^[4] Those practice changes became mandatory on August 17, 2024.^[4]

The core change is this: before you tour a home with an agent, that agent must give you a written agreement that spells out exactly what you will pay and that the amount is negotiable.^[4] That sounds simple, but it represents a structural shift in how the transaction begins.

The Part Most Buyers Miss Is Why This Existed Before

Under the old system, the listing agent posted the commission rate on the Multiple Listing Service (MLS), the database where properties are listed. That rate was typically 5.5 to six percent, split between the listing agent and the buyer's agent.^[1] The buyer never directly negotiated either slice. The rate was listed, not bargained.

NAR has long maintained that commissions were always negotiable and that the cooperative compensation model (where the listing broker offers pay to the buyer's broker) benefits consumers by bringing more agents to the table.^[6] Consumer advocates and the plaintiffs in the Missouri case disagreed. They argued that posting the commission on the MLS created a de facto standard that most buyers and sellers never challenged.^[1]

The numbers in the Missouri case illustrate the stakes. One plaintiff sold her home for $250,000 but paid over $15,000 in agent commission on a listing originally priced at $275,000.^[1] On a $400,000 home at the traditional 6 percent rate, that is $24,000 in combined agent commissions. The question of who pays that, and how visible it is, is now a consumer decision point rather than an industry default.

What the Written Agreement Requires

Under the settlement terms, the written buyer agreement must include four specific elements.^[4]

First, it must disclose the amount or rate of compensation the agent will receive, or explain how that amount will be calculated.^[4] Second, the compensation must be stated as an objective figure or formula, not open-ended. It cannot read "buyer broker compensation shall be whatever the seller offers."^[4] Third, the agreement must state that the agent cannot receive compensation from any source that exceeds the agreed amount.^[4] Fourth, and directly relevant to your negotiating power, the agreement must include an explicit statement that broker fees and commissions are fully negotiable and are not set by law.^[4]

The same logic applies to listing agreements for sellers, though the settlement focused primarily on the buyer-side requirements.^[3] The seller can still offer compensation to the buyer's agent off the MLS, and can still offer buyer concessions such as closing cost help on the MLS itself.^[4]

What the MLS Change Actually Means for You

Compensation offers are no longer displayed on MLS platforms.^[4] This is significant because it removes the visible anchor that the old system relied on. When every listing showed a 5.5 or 6 percent rate, that number functioned as a starting point even if it was technically negotiable. Now, if you want to know what the seller is offering the buyer's agent, you have to ask or negotiate directly.

In practice, this means the conversation about what you pay your agent must happen before you see homes, not after. The NAR FAQ explicitly states that written agreements are required for both in-person and live virtual home tours.^[4] You do not need one just to attend an open house or ask an agent about their services, but the moment you schedule a showing with your own agent, the agreement is required.^[4]

Who Gets Paid in This Transaction

Here is the structural map that most buyers never see. Every party at your closing earns money only when the deal closes. Your listing agent, your buyer's agent, the title company, the mortgage lender, the escrow company, and any home warranty provider are all compensated at closing.^[6] That structure creates a shared financial incentive to keep the transaction moving. None of those parties is paid to tell you to slow down, renegotiate, or walk away.

Your agent's compensation is now a line item you sign off on before you tour a single home. That is new leverage. The agent must disclose it; you have the right to push back before you sign.

What You Can Negotiate Now

The settlement does not cap commissions. It does not regulate what agents charge. What it does is create a documented moment where the fee is explicit and negotiable. The question for you as a buyer or seller is what you actually ask for.

Flat fees, hourly rates, and reduced percentages are all on the table if the agent agrees. Some agents now offer a la carte services, such as help with negotiations only or assistance preparing paperwork for a for-sale-by-owner transaction. These models exist because the settlement opened the door to alternatives beyond the traditional percentage-of-sale.^[1]

There is also the question of what the seller is offering the buyer's agent. Under the new rules, sellers can still offer compensation off the MLS, and buyers can request that information before making an offer.^[4] If you are a buyer and the seller is offering 3 percent to your agent, you have a reference point for negotiating any additional amount with your own agent.

What This Means for You

The NAR settlement did not lower commissions by government decree. It shifted the burden of negotiation from implicit to explicit, and moved it from the end of the transaction to the beginning. Before August 17, 2024, the commission rate was a fixture on every MLS listing, visible to every agent, and invisible to most buyers. After August 17, 2024, you sign a document that states the amount before you tour a home.^[4]

The industry will tell you that this change preserves consumer choice and ensures transparency. Consumer advocates will note that the settlement also eliminates the visible anchor that made the traditional rate feel like a requirement rather than a starting point. Both things are true simultaneously. You now have more information and more responsibility to use it.

The parties who benefit most from the old system (agents who relied on the implicit standard rate) face pressure to justify their fees in writing before you ever step through a door. The parties who paid the most (sellers on lower-value homes where the percentage math hurts hardest) have the most to gain from negotiating on the front end.

What to Do, in Order

1. Before you sign with any agent, ask for the written buyer agreement and read the compensation section. Under the settlement, the agent must disclose the amount or rate and state that it is negotiable.^[4] Ask specifically whether the rate is a flat dollar amount, a percentage, or an hourly figure, and what services are included.

2. Ask the agent what the seller is offering the buyer's agent. Under the settlement, sellers can still offer buyer-agent compensation off the MLS.^[4] This number is your baseline. If the seller offers 2.5 percent and your agent wants 3 percent, you now know exactly what gap you are filling out of pocket.

3. Get two or three competing quotes from agents before signing anything. The settlement made commission negotiation normal rather than confrontational. An agent who will not discuss fees before you sign is an agent who may not adapt to your needs during the transaction.

4. Ask whether the agent offers flat-fee or a la carte options. Some agents now offer limited-service packages, such as help with negotiations only or document preparation only.^[1] If you are comfortable navigating some steps yourself, a smaller scope may mean a lower total fee.

5. Check your state's requirements separately. Several states already had laws requiring written buyer agreements before the NAR settlement took effect.^[4] Your state may have additional protections or disclosure requirements that layer on top of the federal settlement terms.

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Sources: KETV (2024)^[1]; NAR Realtor (2024, 2026)^[2][3][4][5]; NAR Realtor News (2024)^[6]

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^[1]: KETV, "How the NAR settlement impacts future homebuyers," May 13, 2024. https://www.ketv.com/article/supreme-court-nar-real-estate/60758103

^[2]: NAR Realtor, "Our Mission / Membership Benefits / Research & Statistics," March 19, 2026. https://www.nar.realtor/

^[3]: NAR Realtor, "NAR Settlement FAQs," updated September 5, 2024. https://www.nar.realtor/the-facts/nar-settlement-faqs

^[4]: NAR Realtor, "What the NAR Settlement Means for Home Buyers and Sellers," updated May 24, 2024. https://www.nar.realtor/the-facts/what-the-nar-settlement-means-for-home-buyers-and-sellers

^[5]: NAR Realtor, "Summary of 2024 MLS Changes," December 31, 2024. https://www.nar.realtor/about-nar/policies/summary-of-2024-mls-changes

^[6]: NAR Realtor News, "Breaking Down Sitzer-Burnett," February 9, 2024. https://www.nar.realtor/news/real-estate-news/law-and-ethics/breaking-down-sitzer-burnett