NAR Settlement Explained for Buyers: What Changes?

In 2024, the National Association of Realtors (NAR) settled a major lawsuit that changed how real estate agents get paid–and it didn’t favor homebuyers. If you’re looking to buy a home and wondering what these changes mean for you, here’s the NAR settlement explained for buyers so you can avoid costly pitfalls. 

The biggest change? You, as a buyer, are now responsible for paying your agent’s commission directly. This can add 2-3% to your home purchase cost—that’s $8,000-$12,000 on a $400,000 home. This was previously the seller’s responsibility– but not anymore.

But we come bearing GOOD NEWS: You can now negotiate these fees or choose not to use an agent at all, potentially saving thousands of dollars on your home purchase.

🤝 Res/Direct is a smart alternative to a real estate agent. Our team guides you through the entire home-buying process with expert support and zero commission fees, saving you thousands on your dream home purchase.

What Is the NAR Settlement?

The NAR settlement began in 2019 when a group of Missouri home sellers filed a class-action lawsuit against the National Association of Realtors. They claimed the NAR’s rules violated antitrust laws and artificially inflated commission rates.

In October 2023, a jury agreed with the home sellers and handed down a massive $1.8 billion verdict against the NAR, which represents about 1.5 million real estate professionals nationwide.

To resolve this lawsuit, the NAR agreed to pay $418 million to recent home sellers (but denied any wrongdoing). More importantly for future buyers, they agreed to change their rules about how real estate agents get paid. And they changed it so buyers, not sellers, are responsible for paying the 2-3% agent commissions.

How Did Real Estate Commissions Work Before the NAR Settlement?

Before this settlement, the commission system was mostly hidden from buyers.

When sellers listed their homes, they would agree to pay a total commission (typically 5-6% of the sale price) to their listing agent. The listing agent would then offer to share about half of this commission with whatever agent brought in a buyer.

This offer was publicly displayed in the multiple listing service (MLS) listings that only agents could fully access.

Buyers never saw a bill for their agent’s services, so many didn’t realize they were indirectly paying these fees through higher home prices.

Since buyers weren’t directly paying their agents, they had little reason or opportunity to negotiate these fees down. The system effectively set a standard rate for buyer’s agents that rarely changed.

What Does the NAR Settlement Mean to Buyers?

The NAR settlement brings significant changes to the home buyers—both good and bad.

• You’ll pay your agent directly: Instead of the seller covering your agent’s commission, you’ll need to pay it yourself. This typically means 2-3% of the home’s purchase price.
• You need a written agreement first: Before even touring homes with an agent, you’ll need to sign a contract that spells out exactly what services they’ll provide and how much they’ll charge.
• You can negotiate: Since you’re paying directly, you have more power to negotiate the commission rate or structure (flat fee, hourly rate, etc.).
• You can choose not to use an agent: The new rules make it easier to buy without a traditional agent, potentially saving thousands in commission fees. And this is where Res/Direct comes in–giving you expert guidance without the need to pay for an agent at all.
• More transparency: The entire process is now more transparent about who pays what and for which services.
• Potential for lower home prices: Some experts believe home prices might decrease slightly since sellers won’t need to build buyer agent commissions into their asking prices.

The NAR settlement is a double-edged sword for buyers.

On one hand, you face a new upfront cost that could add thousands to your home purchase. On the other hand, you gain more control, transparency, and negotiating power—plus the freedom to skip traditional agent services altogether if you prefer.

Will I Pay My Agent Directly Now?

Yes. Under the new NAR commission rule changes, buyers will pay their agents directly instead of the seller covering this cost.

This means you’ll need to budget for an additional 2-3% of your home’s purchase price.

Real estate agents’ services can be valuable for some people, but others believe that their broker fees and commissions are inflated. Now that you’re responsible for this payment, you have the power to decide if the services justify the cost.

That $8,000-$12,000 in commission on a $400,000 home could instead go toward new appliances, renovations, or building your emergency fund.

SAVINGS CALCULATOR

Try our calculator to see how much you’ll save on a commission-free home purchase when you work with Res/Direct.

How Much Should My Agent’s Commission Be?

There’s no standard rate, and it’s fully negotiable. Traditionally, buyer’s agents received 2.5-3% of the home’s purchase price, but that doesn’t mean you have to pay that much.

Consider the value the buyer’s broker brings to your real estate transaction and negotiate accordingly. Some agents now offer tiered services, hourly rates, or flat fees instead of percentage-based commissions. Remember, there is always a fee associated with this work. 

Can Sellers Still Cover Buyer Agents’ Fees?

Yes, but it’s no longer automatic.

Under the new rules, sellers can still offer to pay your agent’s commission, but it must be negotiated as part of your offer. Your purchase contract would need to specifically state that the seller agrees to cover your agent’s fees.

In competitive real estate markets, sellers may be less willing to cover these costs. If you want the seller to pay your agent’s commission, be prepared to make a stronger offer or compromise on other terms to make this arrangement attractive to the seller.

What Services Should My Real Estate Agent Provide?

It depends.

Real estate agents can typically provide the following services:

• Access to listings (though many are available online)
• Scheduling home tours and providing property insights
• Helping craft competitive offers
• Negotiating with sellers
• Coordinating inspections and appraisals
• Managing contract details and deadlines
• Guiding you through closing

Before signing a buyer-agent agreement, get a clear written list of exactly what services they’ll provide. If they’re charging a full commission, they should deliver a more comprehensive service. If you’re handling some tasks yourself, negotiate a lower rate.

What Does the NAR Settlement Mean for First-Time Homebuyers?

The biggest challenge is budgeting for agent fees that weren’t directly visible before. This adds another upfront cost to your already tight budget for down payment and closing costs.

That said, the settlement also gives you more flexibility. You can negotiate lower fees, choose services like Res/Direct that provide expert guidance without commissions, or handle more of the process yourself.

Now more than ever, it’s important to get educated about the process, understand what services you actually need, and explore all your options before committing to a traditional agent relationship/buyer-broker compensation.

Will Home Prices Change?

It’s possible, but not likely.

Home prices might adjust slightly downward over time, but don’t expect dramatic drops. Theoretically, since sellers no longer need to build buyer agent commissions into their asking prices, we could see modest price decreases.. However, many market experts believe other factors like housing supply, mortgage rates, and buyer demand will have much stronger influences on prices.

Do I Need a Real Estate Agent?

No, you don’t need a traditional real estate agent to buy a home. You have the power to buy without an agent and save thousands on commission fees.

If you value financial freedom, would rather make your own decisions without sales pressure, and want to avoid paying hefty commissions, you might prefer buying a home without an agent.

Options for Home Buyers After the NAR Settlement

You’re not locked into the traditional model and have multiple approaches to choose from based on your comfort level and financial goals.

Option	What It Means	Pros	Cons
Traditional route (paying your own agent)	Hiring a full-service real estate agent and paying their commission directly (typically 2-3% of purchase price)	– Your real estate agent supports you during the process  – The agent handles paperwork and negotiations	– High cost (thousands of dollars) – You’re now directly responsible for this fee – Quality of service can vary widely – Potential conflict of interest
Negotiating commission rates	Working with a traditional agent but negotiating a lower commission rate or having the seller pay it	– Potential for better savings – Still receive real estate agent guidance	– May receive subpar service – Desired rate might get rejected – Agents might be less motivated – You need to be confident enough to negotiate  – Still paying something when alternatives exist
DIY home buying with professional support (like Res/Direct)	Using a service that provides expert guidance at critical moments without charging commission fees	– Save thousands in commission fees  – Get professional support throughout the process  – Avoid sales pressure and conflicts of interest – Maintain full control over your home-buying process	– Requires more self-education and awareness – You manage more of the process yourself

Many buyers find that getting professional support with Res/Direct without paying commissions allows them to take ownership of the process without the fear of overpaying, making mistakes, or missing out on the right home.

How Res/Direct Helps Buyers Navigate These Changes

Res/Direct helps home buyers get the guidance they need without paying hefty commission fees. Here’s how.

• Expert guidance without the commission structure: Res/Direct provides professional support throughout your home-buying process without charging commission fees. We’re compensated through the title and closing portion of your transaction—fees you’d pay regardless.
• Transparent, buyer-focused approach: We’re focused on getting you the best home at the best price, not maximizing our commission check. Since we don’t receive a percentage of your real estate transaction, there’s no conflict of interest.
• Comprehensive support when you need it: Our team of experts helps with the complex parts of homebuying that genuinely require specialized knowledge, such as home inspections and legal paperwork. You’re in complete control of your process, and have us in your corner throughout the entire process to answer questions and guide you through all the necessary steps.

FAQs

Is the NAR Settlement Final?

Yes, the NAR settlement is final, and its changes are already being implemented across the real estate industry. There may be some adjustments as the industry adapts, but the core changes, like buyers paying their agents directly and requiring written agreements, are here to stay.

How Does the NAR Settlement Affect Open Houses?

The NAR settlement changes how you interact with agents at open houses. Before visiting any properties with an agent (including open houses), you’ll need to sign a written agreement that spells out their services and fees.

Who Benefits from the NAR Settlement?

The settlement doesn’t automatically help anyone, but it creates more transparency. Informed, proactive buyers and sellers can take advantage of their ability to negotiate commissions or decide not to use a real estate agent altogether.

The Bottom Line

The NAR settlement made buyers directly responsible for their agent’s commission fees, which are typically 2-3% of your home sale. This adds a new layer of expense if you want to work with a real estate agent, but it also gives you more agency over how you buy your home.

Res/Direct provides expert guidance throughout your entire home-buying journey without charging commission fees. Take our independent home-buying assessment for a personalized roadmap with next steps.