In August 2024, the National Association of Realtors’ $418 million settlement went into effect, and the real estate industry braced for a revolution. Commission structures that had operated essentially unchanged for decades were supposed to collapse. Buyer agent fees were expected to plummet. The entire economics of buying and selling a home were going to transform overnight.
More than a year later, the picture is considerably more nuanced than those predictions suggested. Some changes have been significant and lasting. Others have barely materialized. And a few developments have moved in the exact opposite direction from what most observers expected.
Here’s an honest assessment of where things actually stand.
What the Settlement Changed
The settlement imposed three structural changes that have genuinely reshaped how real estate transactions work.
Offers of compensation disappeared from the MLS. Before August 2024, listing agents routinely posted the buyer agent commission directly on MLS listings — typically 2.5 to 3 percent of the sale price. That field no longer exists. Sellers and their agents can still offer to pay buyer agent compensation, but they communicate that offer through other channels: agent-to-agent conversations, listing descriptions, seller concession fields, or third-party platforms. The practical effect is that buyer agent compensation is no longer automatic or assumed — it requires a deliberate decision and a separate conversation.
Buyer representation agreements became mandatory. Before the settlement, many buyers worked with agents informally — touring homes, receiving advice, and eventually closing a purchase without ever signing a written agreement about compensation. Now, buyers must sign a written agreement with their agent before touring properties. The agreement specifies what the agent will do, how they’ll be compensated, and the terms of the working relationship. This requirement exists in every state, though specific implementation varies by state law.
The compensation conversation moved earlier. The combined effect of removing MLS commission offers and requiring buyer agreements means that compensation discussions now happen at the beginning of the relationship rather than being assumed throughout and settled at closing. Buyers learn what their agent charges, how that charge might be covered, and what alternatives exist before they start the search process rather than after they’ve already found a home.
What Hasn’t Changed (Much)
Despite the structural reforms, several aspects of the real estate commission landscape have proven remarkably durable.
Sellers are still paying buyer agent commissions in most transactions. The settlement’s most-anticipated outcome — buyers paying their own agents directly — has not materialized at scale. Data through early 2026 shows that sellers continue to offer buyer agent compensation in the vast majority of transactions, typically communicated outside the MLS through listing remarks or agent-to-agent discussions. The economic logic is straightforward: sellers who don’t offer buyer agent compensation risk their listings receiving less attention from buyer agents, which can mean fewer showings, fewer offers, and longer time on market. In competitive markets, that’s a trade-off most sellers aren’t willing to make.
Commission rates have not declined. This is perhaps the most surprising development. Average combined commission rates actually increased slightly in 2025, rising from approximately 5.32 percent to 5.44 percent. Buyer agent commissions specifically ticked up from roughly 2.6 percent to 2.82 percent after a brief dip immediately following the settlement’s implementation. The prediction that transparency and negotiation would drive commissions dramatically lower has not played out — at least not yet.
The agent model remains intact. Predictions of mass agent exodus or a wholesale shift to flat-fee and discount models have not materialized. Full-service buyer representation remains the dominant model, and most buyers continue to work with traditional agents who charge percentage-based fees. Technology platforms and alternative models have gained some market share, but the fundamental structure of agent-represented transactions continues to define the industry.
What It Means for Today’s Buyers
If you’re buying a home in 2026, the NAR settlement affects your experience in several practical ways.
You’ll sign paperwork earlier. The buyer representation agreement is now part of the process from the beginning. Before your agent can show you properties, you’ll need to discuss and agree on terms. This isn’t a bad thing — it creates clarity about expectations on both sides — but it’s a step that didn’t exist for most buyers before August 2024. Our first-time buyer guides for each market walk through this process in detail.
You should understand your agent’s compensation. The agreement will specify what your agent charges — typically between 2 and 3 percent of the purchase price, though flat-fee arrangements are increasingly common. It will also outline how that compensation might be paid: by you directly, by the seller through concessions, or through a combination. In practice, most transactions still involve the seller covering buyer agent fees, but you should understand the possibility that you might need to pay some or all of your agent’s compensation out of pocket.
You have more negotiating leverage than before. The transparency that the settlement created cuts both ways. Buyers who understand the compensation structure can negotiate more effectively — requesting that sellers contribute to buyer agent fees as part of the purchase offer, comparing agent fee structures across different agents, or opting for reduced-service arrangements at lower cost if full-service representation isn’t needed for their situation.
First-time buyers face the steepest learning curve. If you’re buying your first home, the new rules add complexity to an already complex process. You’re learning about mortgages, inspections, appraisals, and closing costs — and now you also need to understand agent compensation structures and buyer representation agreements before you even start looking at homes. Working with an experienced agent who can explain the landscape clearly is more valuable now than it was before the settlement. Our cost of living guides help buyers understand the full financial picture.
What It Means for Today’s Sellers
For sellers, the settlement’s impact has been more subtle but still meaningful.
You have a real choice about buyer agent compensation. Before the settlement, offering buyer agent compensation was essentially automatic — the field existed on the MLS and nearly every listing included it. Now, the decision requires active consideration. You can offer compensation to attract the broadest possible buyer pool, offer a reduced amount, or offer nothing and let buyers handle their own agent costs. Each approach carries trade-offs in terms of buyer interest, time on market, and potentially final sale price.
Strategic pricing should account for compensation. If you choose not to offer buyer agent compensation, some buyers — particularly those who can’t afford to pay their agent’s fee on top of the purchase price — may effectively be priced out of your listing. Smart sellers and listing agents factor this dynamic into their pricing and marketing strategies. In fast-moving markets where homes sell quickly and above asking, the compensation decision may matter less. In slower markets, it can significantly affect your buyer pool.
Transparency benefits you too. The settlement’s push toward clearer compensation discussions means you’re less likely to be surprised by commission costs at closing. Your listing agreement should clearly specify what you’re paying your own agent and what, if anything, you’re offering to buyer agents — giving you a complete picture of transaction costs before you list.
The Legal Landscape Ahead
The NAR settlement received final court approval in late 2024, but the story isn’t over. Multiple appeals are pending before the Eighth Circuit Court of Appeals, with a decision expected in 2026. If the settlement is vacated or modified on appeal, the industry could face another round of uncertainty and potential rule changes.
Separately, the Department of Justice maintains an active investigation into real estate commission practices, and additional private lawsuits continue to work through the courts. The regulatory and legal environment around real estate commissions remains fluid, and further changes are possible regardless of the appeal outcome.
For buyers and sellers making decisions today, the practical advice is straightforward: work within the current rules, understand your options, and don’t make assumptions about how compensation works based on how things operated before August 2024. The rules have changed, even if some of the outcomes look familiar.
The Bottom Line
The NAR settlement changed the mechanics of real estate compensation without — so far — changing the economics as dramatically as predicted. Buyers sign more paperwork, sellers make more deliberate compensation decisions, and everyone involved in a transaction has more explicit conversations about who pays whom and how much. These are meaningful improvements in transparency, even if commission rates haven’t declined the way many expected.
For buyers and sellers navigating today’s market, the most important takeaway is to ask questions early, understand your agent’s compensation structure before committing, and recognize that the rules of engagement have shifted even though the fundamental process of buying and selling homes remains the same. Our market guides across all ten ZipStead markets provide city-specific context for making informed decisions.