Last Updated on December 7, 2025 by Elizabeth Nolan
When the National Association of Realtors reached a $418 million settlement in March 2024, industry headlines predicted dramatic changes to how real estate agents get paid. Many expected buyer agent commissions to plummet, sellers to pocket thousands in savings, and the entire real estate transaction process to transform overnight.
Now, over a year after the settlement rules took effect on August 17, 2024, we have real data showing what’s actually happening—and it might surprise you.
The Settlement Changes: A Quick Recap
The NAR settlement stemmed from antitrust lawsuits alleging that the association’s cooperative compensation policies artificially inflated commissions. The settlement introduced two major changes to real estate transactions:
Buyer Agency Agreements Required: Real estate agents must now enter into written agreements with buyers before touring homes. These agreements must clearly specify the compensation amount or rate, include a statement that fees are negotiable, and prohibit agents from receiving more than the agreed-upon amount.
No Commission Offers on MLS: Sellers’ agents can no longer advertise buyer agent compensation on Multiple Listing Service platforms. However, sellers can still offer to pay buyer agent commissions—they just can’t communicate these offers through the MLS.
These changes were designed to increase transparency and give consumers more control over costs. But has that actually happened?
What the Data Shows: Commissions Aren’t Falling
Here’s the headline that few predicted: buyer agent commissions haven’t dropped significantly. In fact, in some price tiers, they’ve actually increased.
According to Redfin’s analysis of buyer agent commissions for closed home sales, the average commission was 2.40% in Q1 2025—up from 2.36% in Q3 2024 when the new rules first took effect. While this represents a slight decrease from the 2.43% average in Q1 2024, it’s hardly the dramatic transformation many anticipated.
Even more striking, a nationwide survey of 806 real estate agents by Clever Real Estate—a St. Louis-based real estate technology platform that matches buyers and sellers with agents—found that average combined buyer and seller agent commissions increased from 5.32% in 2024 to 5.44% in 2025—representing three straight quarters of commission increases since the settlement.
“There were great expectations, including from us, that commissions were likely to drop after the NAR settlement,” explains Luke Babich, co-founder of Clever Real Estate. “By early 2025, commissions had rebounded and even climbed higher than last year’s levels.”
Commission Rates Vary by Price Point
While commission rates have remained relatively stable overall, the data reveals interesting variations across different price tiers. For homes selling above $1 million, average buyer agent commissions dropped to 2.17% in Q1 2025, down from 2.30% a year earlier. This makes sense—agents have more room to negotiate lower percentage rates when they’re still earning substantial dollars from high-value transactions.
Meanwhile, homes under $500,000 saw average commissions rise to 2.49%, up from 2.48% the previous year. The mid-tier market ($500,000-$999,999) also saw slight increases.
But here’s what matters more than the percentage: across all price points, including luxury properties, sellers continue to offer buyer agent compensation.
Why Sellers Are Still Offering Buyer Agent Compensation
Whether you’re in the high-end market or working with more affordable properties, you’ve probably witnessed this firsthand: despite the settlement changes, most sellers continue to offer buyer agent compensation in their listing agreements. This isn’t an accident—it’s market economics at work.
“Most sellers are choosing to pay a 2.5% or 3% commission to the buyer’s agent,” reports Stephanie Kastner, a Redfin Premier Agent in Seattle, though she notes an increase in sellers offering 2%. Other agents report it’s essentially “business as usual.”
Several factors drive this decision:
Competitive Advantage: In markets with elevated inventory, sellers who offer buyer agent compensation make their properties more attractive. When multiple comparable homes are available, compensation can influence which properties get shown more frequently.
Buyer Financial Constraints: First-time buyers and move-up buyers already face significant costs with down payments, closing costs, inspections, and moving expenses. Many simply don’t have additional funds to pay their agent directly. By offering to cover buyer agent fees, sellers expand their potential buyer pool.
Market Efficiency: The existing compensation structure evolved over decades because it works. It enables buyers to access professional representation without upfront costs, which facilitates more transactions.
As Federal Reserve researchers noted in their May 2025 analysis of commission trends, “press reports suggest that sellers’ agents have found ways of sharing information on commission rate offers outside of the MLS,” indicating that the traditional compensation flow continues despite the rule changes.
Consumers Still Value Professional Representation
Beyond commission rates remaining stable, there’s an even more telling indicator that the settlement hasn’t fundamentally disrupted the market: consumers continue to work with real estate agents at near-universal rates.
According to NAR’s 2025 Profile of Home Buyers and Sellers—covering transactions from July 2024 through June 2025, the period immediately following the settlement—88% of home buyers used a real estate agent or broker to purchase their home. Even more striking, 91% of sellers used a real estate agent, up from 90% the previous year and matching the highest percentage on record.
Meanwhile, For Sale By Owner (FSBO) transactions hit an all-time low of just 5%. This isn’t just a marginal decline—it represents a continued rejection of the do-it-yourself approach to one of life’s largest financial transactions.
The price difference tells the story: agent-assisted homes sold for a median of $425,000, while FSBO homes sold for just $360,000—a $65,000 gap that far exceeds typical commission costs.
“Real estate agents remain indispensable in today’s complex housing market,” says Jessica Lautz, NAR’s deputy chief economist. “Beyond guiding buyers and sellers through what is often the largest financial decision of their lives, agents provide critical expertise, negotiation skills and emotional support during an increasingly challenging process.”
This data reveals a crucial truth: the settlement changed administrative procedures, but it didn’t fundamentally alter the value proposition that professional real estate representation offers consumers.
Related article: How to Articulate Your Unique Value Proposition as a Real Estate Agent (And Finally Answer “Why Should I Choose You?”)
The Real Change: Written Buyer Agreements
While commission rates and agent usage remained stable, one significant operational change did emerge from the settlement—and it’s not about money, it’s about paperwork and timing.
Before the settlement, buyer agency agreements existed but weren’t universally required or strictly enforced. Some states already mandated them, but many agents operated on informal understandings with clients.
Now, every buyer must sign a written agreement before touring homes. This agreement must clearly state:
- How much the agent will be paid and by whom
- That compensation is negotiable and not set by law
- That the agent cannot receive more than the agreed amount
This represents a fundamental shift in when the compensation conversation happens. Instead of discovering fee arrangements during contract negotiations, buyers now understand their agent’s compensation upfront.
“The increased commission transparency gives buyers and sellers more control and clarity about commissions and costs, which is a win,” says Sara Linton, a real estate broker at Chicago’s Baird & Warner.
Market Dynamics and Price Point Drive Commission Variations
While national averages tell part of the story, commission rates vary based on two key factors: price point and local market dynamics—though not always in the ways you might expect.
The Price Point Effect
Higher-priced homes see lower commission percentages, while more affordable properties command higher rates:
- Luxury homes ($1 million+): 2.17% average commission
- Mid-tier ($500,000-$999,999): 2.29% average commission
- Affordable (under $500,000): 2.49% average commission
This makes economic sense. On a $2 million sale, even a 2.17% commission yields $43,400—allowing agents room to negotiate on percentage while still earning a substantial fee. On a $300,000 home, agents need higher percentages to make transactions financially viable.
The Buyer’s Market Paradox
Here’s where conventional wisdom gets turned on its head: in today’s buyer’s market conditions, commissions are actually rising in many areas.
“Austin’s market is slow, so buyers have a lot more power,” explains Andrew Vallejo, a Redfin agent in Texas. “Most buyer’s agents now request a commission of 3%, up from 2.5-2.75% prior to the NAR settlement. Buyers can walk away if the seller does not pay the buyer’s agent commission, and they’ll likely be able to find another home they like with a seller who is willing to pay.”
As of mid-2025, the U.S. housing market showed 500,000+ more sellers than buyers—the biggest disparity Redfin has tracked since 2013. In this environment, sellers compete for scarce buyers by offering attractive agent compensation. Jo Chavez, a Redfin agent in Kansas City, notes that while more sellers ask about offering no or low commission, “in most cases, in today’s market, the buyer can stay firm.”
The fundamental practice of sellers offering buyer agent compensation has proven remarkably resilient across price points and market types, driven by practical economics: sellers want to attract the maximum number of qualified buyers, and most buyers can’t or won’t pay their agent out of pocket.
What Agents Are Learning
For real estate professionals, the settlement has created both challenges and opportunities. Buyer agents now need to clearly articulate and defend their value proposition earlier in the client relationship.
“Buyer’s agents who want to stay busy are going to need to learn to showcase and defend the value they are adding to the process as they negotiate their own compensation,” explains Alex McEwen, broker associate at Selling Utah. “Buyer’s agents who can’t demonstrate that they are effective agents for their clients are going to have a real problem.”
This shift emphasizes the importance of professional expertise, market knowledge, and negotiation skills—qualities that successful agents already possessed but now must communicate more explicitly.
Related article: The Essential Guide to Representing Home Buyers: Proven Strategies for Real Estate Agents
The Negotiation Reality
Despite increased transparency, most consumers aren’t actively negotiating commissions. A Redfin survey conducted in March-April 2025 found that only 37.4% of recent sellers attempted to negotiate their agent’s commission, while 45.9% did not try.
Buyers were even less likely to negotiate—just 27.2% tried negotiating their agent’s commission, while 47.8% did not. This makes sense given that in most transactions, sellers still cover buyer agent fees.
Looking Forward: What This Means for You
For Sellers: You’re not required to offer buyer agent compensation, but in most markets, it remains strategically advantageous. Work with your listing agent to determine the right approach for your property and local market conditions. In competitive markets or when targeting first-time buyers, offering compensation can significantly impact your showing activity and eventual sale.
For Buyers: You now have more transparency about how your agent gets paid, but you’re also responsible for understanding and agreeing to compensation terms before touring homes. Ask questions, negotiate if appropriate, and remember that in most cases, sellers still cover buyer agent fees as part of negotiations.
For Agents: The settlement reinforces the importance of clearly communicating your value. Whether you’re representing buyers or sellers, be prepared to have detailed conversations about services, expertise, and compensation earlier in the relationship.
The Bottom Line
The NAR settlement hasn’t revolutionized real estate compensation—at least not yet. Instead, it has increased transparency, shifted when compensation conversations occur, and given both buyers and sellers more explicit control over the process.
Most sellers continue offering buyer agent compensation because it makes economic sense in their local markets. Most buyers continue working with buyer agents because professional representation provides value that justifies the cost. And most agents continue earning commissions at rates that reflect the complexity and responsibility of facilitating one of life’s largest financial transactions.
The dramatic transformation many predicted hasn’t materialized. What we’re seeing instead is evolutionary change: more transparency, clearer agreements, and earlier conversations about compensation—all while the fundamental economics of real estate transactions remain largely intact.
As Leo Pareja, CEO of eXp Realty, aptly noted when the settlement was announced: “This is a grand social experiment. None of us know what’s about to happen.” Over a year later, we have our answer: far less changed than anyone expected, and what did change has largely improved transparency without disrupting the market’s basic functioning.
The real estate industry has proven remarkably resilient, adapting to new requirements while preserving the cooperative compensation structure that facilitates transactions and serves consumers effectively. For most markets, especially in the high-end sector, it’s business as usual—just with better documentation and clearer communication about who pays whom, when, and why.
Additional Resources
Official NAR Settlement Information:
- NAR Settlement FAQs – Comprehensive answers to common questions about the settlement
- What the NAR Settlement Means for Home Buyers and Sellers – Official NAR overview
Research and Data:
- NAR 2025 Profile of Home Buyers and Sellers – Annual survey data on buyer and seller behavior
- Redfin Commission Analysis – Quarterly updates on commission trends
- Federal Reserve: Commissions and Omissions – Economic analysis of broker compensation trends
