I just signed back up with a brokerage—after owning my own I'd rather pluck out my good eye than "dad" a bunch of agents again—I did an initial call today for a listing, one of my clients wants to buy and sell, and was in the groove until I mentioned something that stopped my people cold.
"You know you don't have to offer buyer agent compensation anymore, right?"
The husband looked at his wife, then back at me. "What do you mean we don't have to?"
For twenty minutes, I explained how the August 2024 NAR settlement had handed them a strategic weapon they didn't know they owned [1][2]. They'd been expecting to list their home the same way everyone did before—automatically budgeting 5-6% in commissions [1]. They had no idea the game had changed in their favor. They decided to pay the standard commission regardless.
This couple isn't alone.
Research shows paradigm—pronounced pair-a-dime not pair-a-dij-em, which was how I pronounced it in my head until I was 19—changes, especially in policy or industry rules, typically take months to years for widespread public awareness [1]. Most sellers are still playing by the old rules because no one told them the new ones.
The NAR settlement didn't just change how buyer agents get paid—it shifted negotiating power to sellers in ways most haven't discovered yet [1][3]. While buyers struggle with representation agreements and direct payment obligations [1][3], sellers gained tactical control over buyer agent compensation that they're not using because they don't know it exists.
Compensation is now strategic, not automatic
Before Aug. 17, 2024, when you listed a home, you automatically offered buyer agent compensation through the MLS—usually 2.5% to 3% of the sale price [1]. That offer was visible to every buyer agent in the system, and sellers paid it regardless of whether it helped sell the house. Now, compensation offers happen through direct communication between agents, giving sellers control over when, how much, and to whom they offer it [1][2].
This isn't about saving money on commissions—it's about using compensation strategically to attract the right buyers faster.
Communicating compensation without destroying yourself
The settlement specifically prohibits advertising compensation on the MLS, but it doesn't prohibit offering it through other channels [1][2]. Here's how you communicate structured compensation without violating the rules.
The golden rule: off-MLS, on demand.
The core mandate is clear—the MLS cannot be used to communicate any offer of compensation to a buyer's broker [1][2]. This means the field in the MLS listing that once automatically populated with a 2.5% or 3% offer is now blank or shows $0.
The settlement doesn't forbid a seller from offering to pay a buyer's agent. It just can't be done through the MLS [1][2]. Communication must shift to direct, off-MLS channels.
Sidebar: I really don't want to go into this next part but—think of me as that mom that let the kids drink in the rec room; I know you're going to do it; I can't stop you; you'll figure it out on your own. Here's a way to talk about it without immediately losing your license and getting brought up on charges.
Structuring Compensation as a Strategic Tool
Here's where the real opportunity lies for your sellers. Instead of a one-size-fits-all approach, we can now design compensation structures that reward the behaviors and terms that benefit your specific situation.
Consider tiered compensation based on offer quality. You might offer 3% for offers with minimal contingencies, 20%+ down payments, and flexible closing timelines that work with your moving schedule. For offers with multiple contingencies, lower down payments, or awkward closing dates that create moving hassles, you might structure compensation at 2% or even less.
The message to buyer's agents becomes clear: bring me clean, strong offers and you'll be rewarded accordingly. This isn't about being cheap—it's about being smart with your money and creating incentives that align with your goals.
Timing-based compensation structures can accelerate your sale. Offer a bonus commission for offers received within the first 10 days of listing, or additional compensation for buyers who can close within 30 days if you need a quick sale. Conversely, if you're not in a hurry, you might structure lower base compensation but include performance bonuses for exceeding your target price.
Property-specific compensation addresses unique selling challenges. If you're selling a fixer-upper that will require more work from the buyer's agent to educate potential buyers, you might offer higher compensation to acknowledge the extra effort. For turnkey properties in high-demand neighborhoods where the house practically sells itself, a different structure might make sense.
Direct conversation wins every time
Pick up the phone and have the compensation conversation the way we did business for decades before MLS remarks became a crutch.
Educate sellers about the new reality
They need to understand why commission details disappeared from MLS listings and how this affects marketing their property. In California's Residential Listing Agreement (RLA), commission terms are specified in Paragraph 3A (1), which details when and how the broker earns their commission [5]. Under this exclusive right to sell agreement, the broker receives full commission regardless of how the property is sold [1][5].
The compensation conversation moved from public advertising to private negotiation [1][2]. Agents who master direct communication will thrive while others struggle with the adjustment to post-settlement real estate practices.
Sources Cited
[1] Kiplinger. "Why a Landmark Real Estate Commission Settlement Hasn't Dropped Costs."
[2] CCIM Institute. "National Association of REALTORS® Settlement - Will it Impact Commercial Real Estate Transactions?"
[3] Clever Real Estate. "Average Real Estate Commission in California: 2025 Survey."
[4] Federal Reserve Bank. "Commissions and Omissions: Trends in Real Estate Broker Compensation." May 12, 2025.
[5] Sebastian Frey. "Quick Guide to the California Residential Listing Agreement for Bay Area Homeowners."
[6] Greiner Law Corporation. "California Association of Realtors Forms: Essential 2025 Guide."
