The 2024 NAR Settlement: A New Era for Real Estate Commissions—Same Prices, New Rules

For decades, the process of buying and selling a home in America followed a familiar, if opaque, financial script. A seller would list a home, agreeing to pay their listing agent a commission—typically 5-6% of the sale price—which would then be split with the buyer’s agent. This “cooperative compensation” offer was advertised directly on the Multiple Listing Service (MLS), creating a standardized system that the U.S. Department of Justice and class-action plaintiffs argued was anti-competitive and artificially inflated costs. The climax of these legal battles was the National Association of Realtors (NAR) settlement, approved in late 2024, which mandated seismic shifts in how commissions are communicated and negotiated. However, as data from the full year of 2025 demonstrates, the settlement has radically altered the rules and process of commission payments without yet triggering the dramatic price deflation many consumers anticipated.

The Core Mechanic: Banning “Blanket” Offers from the MLS

To understand the 2025 landscape, one must understand what the settlement actually prohibits. Prior to the changes, a listing agent could input a commission offer for the buyer’s agent directly into the MLS feed. Plaintiffs in Sitzer/Burnett successfully argued that this was a price-fixing mechanism; it created a benchmark that discouraged negotiation and incentivized buyer’s agents to “steer” clients away from homes offering lower co-brokes.

Effective August 2024, the settlement mandated that NAR-affiliated MLSs delete the commission field entirely. Offers of compensation to a buyer’s agent can no longer be published on the MLS. This is the single most important technical change of the settlement. It severs the direct, visible link between the seller’s listing and the buyer’s agent’s paycheck. While this was intended to foster competition, it has primarily shifted the conversation offline. Sellers and listing agents can still offer to pay the buyer’s agent—and 78% of agents surveyed in late 2025 reported that sellers were still doing so—but they must now communicate this via phone calls, text messages, or private contract addendums rather than the public MLS feed.

Mandatory Buyer Agreements: The End of “Free” Service

While the MLS rule change targets the advertising of fees, the settlement’s second pillar targets transparency. As of 2025, agents are prohibited from showing a home to a buyer without a signed written buyer representation agreement in place. This requirement has fundamentally altered the psychology of the transaction.

Previously, buyers often viewed their agent’s services as “free,” since the seller technically footed the bill. Today, before touring a property, a buyer must sign a contract conspicuously disclosing their agent’s compensation—whether a percentage, flat fee, or hourly rate. Crucially, the settlement mandates that this compensation must be “objectively ascertainable.” It cannot be open-ended. A contract that states the agent will receive “whatever the seller offers” or a “range between 2% and 3%” is explicitly prohibited. The buyer must agree to a specific, defined payment obligation.

This creates a new financial reality for the consumer. Even if the buyer intends to ask the seller to cover this cost during negotiations, the liability now technically rests with the buyer. If the seller refuses to pay, or if the offered concession is less than the contracted amount, the buyer is on the hook to pay the difference out-of-pocket.

The Myth of the Price Crash: 2025 Commission Data

If one were to read only the headlines from 2024, they would expect the 2025 market to be characterized by fierce price wars and sub-2% commissions. Instead, empirical data from 2025 tells a story of “snap back.”

According to multiple surveys—including those from RISMedia, Redfin, and Clever Real Estate—commission rates in late 2025 are hovering near their pre-settlement norms. The national average commission rate sits at approximately 5.39% to 5.44% , with buyer’s agents averaging roughly 2.4% to 2.67% and listing agents averaging 2.77%. Immediately following the settlement announcement, rates dipped slightly (buyer’s agent commissions fell to roughly 2.36%). However, by the second and third quarters of 2025, rates had rebounded to levels statistically consistent with historical fluctuations.

This resilience is attributed to several “work-arounds” and market forces. First, the settlement does not prohibit seller concessions. While a seller cannot advertise a 2.5% co-broke on the MLS, they can offer a 2.5% “concession” toward the buyer’s closing costs, which the buyer then directs toward their agent. Second, industry experts note that listing agents have gained leverage. In this new environment, the listing agent often controls both sides of the commission discussion, and data suggests listing-side fees have actually increased in some regions while buyer-side fees remain sticky.

Compliance, Loopholes, and Enforcement Challenges

The implementation of the settlement in 2025 has not been uniform, leading to significant confusion. The Wisconsin Realtors Association Legal Hotline reported numerous inquiries regarding “work-arounds,” specifically whether agents could amend buyer agreements to match higher seller offers. NAR guidance has been strict on this point: agents cannot amend an agreement solely to match a higher offer of compensation. To do so violates the prohibition on open-ended compensation.

Furthermore, the settlement applies primarily to NAR-affiliated MLSs. While this covers the vast majority of transactions, it does not prohibit private offers of compensation. Additionally, the Department of Justice (DOJ) has signaled that it is watching the industry closely. Experts at the 2025 National Settlement Services Summit (NS3) noted that the DOJ has given the industry approximately 18 months to self-correct. If uniformity fails to materialize, or if state attorneys general continue to push for a total ban on cooperative compensation, further federal intervention is likely.

Valuation and the Closing Statement

The 2025 rules have also complicated the appraisal and closing processes. Appraisers, who rely on MLS data to determine comparable sales, now face a data gap. They know the final sales price, but the specific amount paid to the buyer’s agent is no longer a public field in the MLS; it is a private contractual term. Industry experts like Ray O’Neil stress the importance of treating the buyer’s agent commission as a “built-in” cost rather than a concession. If an agent incorrectly labels the payment as a seller concession (typically reserved for repairs or closing costs), an appraiser may deduct that amount from the perceived value of the home, potentially jeopardizing the loan.

Settlement agents and title companies have also had to adapt. Many now require a fully executed buyer-broker agreement prior to clearing the closing. Delays in obtaining these compensation instructions became a “significant pain point” in 2025, as lenders require strict accounting of where commission dollars are flowing.

Consumer Behavior: The Inertia of Negotiation

Despite the settlement’s goal of empowering consumers, 2025 data suggests most buyers and sellers are still not negotiating commissions. A Redfin survey conducted in early 2025 found that nearly 46% of sellers did not attempt to negotiate their listing commission, and nearly 48% of buyers did not attempt to negotiate their buyer’s agent’s fee. This suggests that while the structural rules have changed, the cultural norms surrounding real estate transactions remain deeply entrenched.

Conclusion

The 2025 NAR settlement represents a definitive end to the 1990s-era commission model. The MLS is no longer a clearinghouse for agent compensation, and the buyer agency agreement is now a mandatory, binding contract. However, the price of those services has proven remarkably resilient. While the settlement successfully decoupled the advertising of fees from the MLS, it did not decouple the payment of fees from the seller. As long as sellers view paying the buyer’s agent as a competitive advantage to secure the highest price—and as long as buyers lack the liquidity to pay their agent upfront—the 5-6% commission structure is likely to persist, albeit negotiated through a more fragmented, private, and complex channel. The settlement did not fix prices; it fixed the process. Whether that process eventually yields price disruption remains the defining question for the 2026 real estate market.