I was caught off guard by the NAR settlement; it seemed like a non-event until all the new paperwork started. The last time I experienced such a sudden industry-wide paperwork migration was in 2019 with the Property Entry and Advisory Declaration (PEAD) form. But this time, it wasnât an external pandemic causing disruptionâit was an epidemic within NAR itself, a disease of âas usualâ practices that generated antitrust lawsuits.
The National Association of Realtors (NAR) agreed to settle the lawsuits which claimed MLS rules, requiring home sellers to offer compensation to buyer agents, inflated commissions and shifted buyer broker fees onto sellers, in violation of the Sherman Antitrust Act. The 2024 settlement included a $418 million payment and reforms.
Brokers and MLSs rushed to comply, and these rule changes were quickly implemented in an uneven and slapdash way, leaving agents without clear guidance and facing significant compliance challenges. The most immediate consequences for agents have been widespread confusion and disruption. Agents now face uncertainty over their compensation as guaranteed seller-paid commissions disappear.
Q: How do I explain to a buyer that they might have to pay me directly now?
America:
Having this be the first conversation with a new client is a heavy lift, and was a difficult one for me, but thankfully we have a form for it now. The Buyer Broker Agreement (BBA) outlines how weâre to be compensated and ensures you and your buyer are both on the same page from the start.
My BBAs typically specify a 2.5% commission, with buyers responsible for making up any difference if the sellerâs offer falls short. But compensation can also be structured as hourly fees, flat rates, or a combinationâyour broker can guide you on what works best in your market.
My experience has been that sellers still are offering compensation to selling (buyerâs agents, câmon learn the lingo lol) agents. I explain to my sellers that by limiting or not offering compensation to selling agents they drastically reduce their buyer pool; sellers pay compensation from proceeds; buyers need to pay upfront. I donât know about you but every time I buy something it feels like I canât afford another 3% and Iâve been around for a while.
Listing agents are prohibited from advertising selling agentâs compensation on the MLS, but we can on a phone call. Always confirm buyer-agent compensation early. Call the listing agent.
Remember when writing offers (in CA at least) make sure to check the box, California Association of Realtors (CAR Residential Purchase Agreement (RPA) page 2, section G âSELLERS PAYMENT TO COVER BUYERâS EXPENSES AND COSTSâ subsection 3, 18A, Seller Payment to Compensate Buyerâs Broker and add in your commission percentage.
If navigating these conversations feels challenging, lean on your broker or Realtor association for supportâthey have resources to help you structure agreements.
Q: What's the protocol if a buyer is working with multiple agents without written agreements?
America: The one with the written agreement gets paidâplain and simple. In California, we are required to have a signed Buyer Broker Agreement (BBA) before showing homes or providing services beyond basic inquiries. Without that agreement, we have no legal claim to a commission.
If a buyer works with multiple agents but only signs a BBA with one, that agent is the one entitled to payment upon closing, regardless of who else showed properties or did work. This is why we agents push for the BBA upfrontâit protects our time, and clarifies the professional relationship.
I cannot stress enough the importance of getting a BBA before doing anything with an unknown client. I recently, and Iâve been an active licensed real estate broker for 24 years, did some work for a client at an open house, sent a disclosure package after they told me they didnât have representationâonly to find out they werenât telling the truth. This kind of situation reinforces why written agreements are essential to protect your time and commission.
Q: If I can't post buyer-agent compensation on the MLS anymore, how do cooperating brokers know what I'm offering?
America: You can post buyer-agent compensation wherever you wantâyour website, social media, email blasts, flyers, even interpretive dance if that gets the message across! The new rules just prohibit posting that information on the MLS itself.
Because compensation offers no longer show automatically in MLS listings, communicating clearly and creatively through all your other marketing channels is key. Cooperating brokers will call and ask for your compensation details. My experience has been direct agent-to-agent communications (people are answering their phones again), broker networks and apps designed for off-MLS information sharing is where this information is now being communicated.
Bottom line: MLS rules barring information on compensation means you have to be louder elsewhereâjust make sure your message is clear, consistent, and easy to find so buyerâs agents know what youâre offering before bringing clients.
Q: What happens if a buyer refuses to sign a BBA?
America: Thatâs a difficult call to make. I know what itâs like to be new, or not so new, and eager to work with a client. We agents practice real estate like attorneys practice lawâwe learn by doing, and we all love to learn. Unfortunately, learning costs time and my best advice isnât what I wanted to hear when I was newer.
You should carry onâone of the best things about the NAR settlement is the end of the âtire kicker,â meaning you no longer waste time with the âjust lookingâ crowd. With mandatory Buyer Broker Agreements (BBAs), you know upfront who is serious and ready to proceed, which helps focus your energy on committed buyers who understand and agree to your compensation terms.
This shift means less practice but fewer wasted showings, higher-quality leads, and a more efficient transaction process overall. A buyer that refuses to sign, sends clear signal theyâre not ready to move forward, so itâs better to focus on those who are.
