Working with a buyer’s agent after the NAR settlement: what changed

Until August 2024, buyer’s agents in the US were almost always paid out of the seller’s commission. The seller agreed (via the listing contract) to pay roughly 5–6% to the listing brokerage, who then split half with the buyer’s brokerage. The buyer signed nothing about commission and paid nothing directly.

That model is gone. After the NAR Sitzer/Burnett settlement took effect August 17, 2024, the rules changed across most of the country. The new world: buyers sign a written buyer representation agreement before touring any MLS-listed home, the agreement spells out exactly what the agent gets paid, and the seller is no longer automatically on the hook to pay the buyer’s side.

Quick terminology note that trips up almost everyone: in industry-speak, the listing agent is the SELLER’s agent, and the selling agent is the BUYER’s agent on a sale (because they “sold” the buyer on the home). It’s confusing, and it’s why most agents now just say “buyer’s agent” and “listing agent” in conversation.

This guide covers what actually changed, what a buyer’s agent does for the money, the new commission models, and how to negotiate the buyer-broker agreement that you’re now required to sign.

The pre-settlement model (so you understand what changed)

• Listing agreement: seller agrees to pay 5–6% total commission to the listing brokerage
• Listing agent splits roughly half with whatever brokerage represents the buyer (the “co-op” commission)
• This split was published on the MLS so all buyer’s agents could see it before showing the property
• Buyer signed nothing about commission and paid nothing visible at closing — the commission came out of the sale proceeds

The lawsuit’s argument: this structure inflated home prices, restricted competition on commission, and steered buyer’s agents toward higher-commission listings. NAR settled for $418M and agreed to the rule changes.

The post-settlement model

Three big changes:

1. MLS systems can no longer publish offers of buyer-broker compensation. A buyer’s agent can’t see what the seller is offering them just by browsing the MLS — that field is gone.
2. Buyers must sign a written buyer representation agreement before touring any MLS-listed home (open houses are the main exception, and even most listing agents will ask you to sign a one-property “showing agreement” before they walk you through). The agreement states the commission and how it’s paid — in actual dollars or as a specific percentage. Vague “market rate” language is no longer allowed.
3. Sellers are no longer required to offer buyer-side commission as a condition of MLS listing. Many still do (offered off-MLS, in marketing remarks, or via concession in the contract), but it’s no longer automatic or visible until your agent calls and asks.

What this means in practice: buyer-side compensation is now a negotiated item, often as part of your offer. Common patterns:

• Seller advertises a concession (e.g., “seller will contribute up to 2.5% to buyer’s closing costs / agent compensation”). Most listings still telegraph this somewhere — agent remarks, sign riders, the listing brokerage’s site, a phone call to the listing agent.
• Buyer’s agent calls the listing agent before showing to ask what, if anything, the seller will offer. This is now a routine pre-showing call.
• Buyer asks seller to cover compensation in the offer itself, often framed as a closing-cost concession. Seller can accept, reject, or counter.
• Seller refuses entirely — buyer pays out of pocket OR negotiates a seller credit at closing (which has lender implications — see below).

What a buyer’s agent actually does

For 2.5–3% of price (or whatever model you negotiate), a competent buyer’s agent provides:

• Comp analysis before you offer. Recent sales, active comps, days on market, price trends. Tells you whether asking is reasonable.
• Tour scheduling and showing logistics
• Offer drafting. State-specific contracts with the right contingencies, timelines, EMD amount, financing terms. Mistakes here cost real money.
• Negotiation. Both initial offer and post-inspection re-negotiation.
• Inspection management. Vendor recommendations, attendance, helping decide what’s a deal-breaker vs cosmetic.
• Appraisal contingency navigation. If the appraisal comes in low, what are your options? See the appraisal gap calculator.
• Coordination with lender, title, and seller’s side through closing.
• Walkthrough day-of-closing.
• Local knowledge. School districts, traffic, neighborhood quirks, flood zones, builder reputations.

The bad ones do mostly tours and offer paperwork. The good ones save you 1–3% on price through negotiation alone, plus catch problems during inspection that would have cost you 5–10x their commission.

Commission models in the post-settlement world

Compensation structure is now genuinely negotiable. In practice most agents have a “default” they quote, but almost all will negotiate — especially in higher price points or for repeat business.

• Traditional percentage: 2.0–3% of purchase price. Still the most common. Post-settlement, 2.5% has become the new “default” in many markets where 3% used to be standard. Aligns agent incentive with finding you a home (more or less — higher price = higher commission, which has its own problems).
• Flat fee: $5,000–$15,000 regardless of price. More common post-settlement. Better for high-priced markets where 3% is absurd ($30,000+ on a $1M home for the same work as a $400k home).
• Hourly: $150–$350/hour, with a cap. Rare. Works for buyers who already know what they want and need transactional support.
• Hybrid: small flat retainer ($500–$2,000) plus a smaller percentage (1–1.5%). Compromise between the two.
• Tiered: e.g., 2.5% up to $X, then 1% on the marginal amount above. Caps the absurdity at the high end without going full flat fee.

Ask the agent what their model is. The good ones are upfront. If they hedge or change the answer when pressed, walk.

A real-world note: if a seller is offering 2.5% and your agreement says 2.5%, the math is clean. If the seller offers 2% and you signed for 2.5%, you owe the 0.5% gap at closing. If the seller offers 3% and you signed for 2.5%, the agent generally cannot pocket the extra — NAR rules and most state laws require the excess be credited to you or re-negotiated. Confirm this language in the agreement.

How to negotiate the buyer-broker agreement

The agreement is now required, but its terms are negotiable. Push back on the standard form. Things to actually negotiate:

Term length

The default form often runs 6 months or longer, exclusive. This locks you to one agent for half a year. Push for 30–90 days, renewable. If the agent is good, you’ll renew. If not, you’re out faster.

Exclusive vs non-exclusive

Exclusive means: even if you find the home yourself, you owe the agent commission. Non-exclusive means you can work with multiple agents and only pay the one who actually procured the sale. Try for non-exclusive or at least a narrow exclusivity scope (only homes the agent showed you).

Compensation amount and source

The contract specifies what you owe the agent. Crucially, it should also clarify what happens if the seller doesn’t cover all of it. Three common structures:

• “Buyer owes X%, less any amount paid by seller.” If seller pays 2% and contract says 2.5%, you owe the 0.5% gap.
• “Buyer owes X%, period — agent will work to have seller pay it but buyer is on the hook either way.”
• “Buyer owes only what seller pays, capped at X%.” Most buyer-friendly if you can get it.

You want option 1 or 3, ideally with a cap that’s not absurd.

Cancellation terms

Can you fire the agent? Under what conditions? With or without notice? Most form contracts make this hard. Push for a clean cancellation right with 14-day notice for any reason.

Geographic and property type scope

Is the contract for any property anywhere, or just a specific area / property type? Narrower is better.

Procuring cause language

The agent only earns commission if they were the “procuring cause” of the sale. Language varies. The cleaner the standard for what counts as procuring cause, the better.

Lender implications of seller-paid commission

If you negotiate for the seller to pay your agent’s commission via seller credit at closing, the credit counts against the loan’s seller concession cap:

• Conventional <10% down: 3% cap
• Conventional 10–25% down: 6% cap
• Conventional >25% down: 9% cap
• FHA: 6% cap
• VA: 4% cap

If your asking-price seller credit (closing costs, points, agent commission) exceeds the cap, the lender will reduce the credit and you eat the gap. On a VA loan with a 4% cap, asking the seller for 3% in agent commission plus 3% in closing costs blows through — 2% gets cut. See the closing costs calculator for how this plays out.

Also: a seller credit isn’t a price reduction. It’s the same contract price with money flowing back at close. Your loan amount doesn’t change. Your appraised value still has to support the contract price. Some buyers prefer to negotiate a price reduction instead, which lowers the loan and the property tax basis.

Going without an agent

You can buy a home without a buyer’s agent. It’s legal in every state. But:

• You don’t save the commission. The seller pockets it (or pays less to their listing agent if the listing agent isn’t doubling up). The seller’s agent has zero duty to you.
• You take on contract drafting yourself. State-specific requirements, contingency timelines, and inspection/appraisal language matter. Mistakes are expensive.
• You handle negotiation alone. Including counter-offers, repair requests post-inspection, and any disputes.
• You manage the contingency clock. Miss a deadline and you can lose your earnest money or weaken your position.

The case for going without: experienced buyer with multiple prior purchases, simple transaction (cash or large down), willing to hire a real estate attorney for contract review ($500–$1,500). For a first-time buyer or anything complex, the math almost always favors having an agent.

Agency types and dual agency: be wary

Agency law varies state to state. The basic categories:

• Single agency — the agent owes full fiduciary duty (loyalty, confidentiality, full disclosure) to one side only. The cleanest arrangement.
• Dual agency — the same individual agent represents both buyer and seller. Fiduciary duty collapses; the agent becomes a neutral facilitator. Banned outright in a handful of states (notably Florida, Alaska, Kansas, Colorado, Vermont, Oklahoma, Maryland, Texas in practice via “intermediary” rules — verify your state’s current rules, they shift).
• Designated agency — same brokerage, but two different agents represent the two sides, with a “Chinese wall” between them. Better than true dual agency, but the broker still has a financial interest in both sides. Most common in firms with large agent counts.
• Transaction brokerage / facilitator — agent represents neither side, just facilitates the paperwork. Used in Florida, Colorado, and a few others as an alternative to single agency. No fiduciary duty to either party.

Where dual agency comes up most: open houses, where the listing agent meets you and offers to “represent” you on the offer. The pitch is usually “I can get the deal done faster” or “the seller will take less because the brokerage saves on commission.” Both can be true, but you’re giving up an advocate. In a complex negotiation — inspection re-trade, appraisal gap, repair credits — the dual agent legally can’t take your side. Your own agent can.

Red flags in agents

Walk if you see:

• Pushing you to skip inspection. The inspection contingency is yours. An agent who pressures you to waive it cares about closing the deal, not you.
• Dismissing your budget concerns. “You can stretch a little” is an agent maximizing their commission, not advocating for you.
• Won’t put recommendations in writing. Verbal-only advice on contingency timing or offer strategy is a tell.
• Talks more than they listens. First meeting should be 70% them asking what you want, 30% them talking.
• Always available, no other clients. Either inexperienced or desperate — both are signals.
• Pressure on the buyer-broker term. “Just sign the standard 6-month exclusive, everyone does.” Not anymore.
• Recommends only their brokerage’s in-house lender, title, and inspector. Some affiliate referrals are fine, but a one-stop pitch with no alternatives is a kickback structure, not a referral.

Common mistakes

• Signing the buyer-broker agreement on first meeting without reading it. The pitch is usually “it’s just a formality, the state requires it.” Sort of true. The terms still bind you. Read every clause. Negotiate term length, exclusivity, and the compensation fallback before you sign.
• Signing for a long, exclusive, statewide term. Some agents will push a 6-month exclusive covering an entire metro. If you don’t click after the first few showings, you’re stuck. Push for 30 days renewable, or scope it to specific properties you tour together.
• Not interviewing multiple agents. Talk to 2–3 before signing. Different specialties (first-time buyers, luxury, investment, relocation, new construction) suit different transactions.
• Confusing seller credit with price reduction. A $10k credit and a $10k price cut are not equivalent at close. Credit keeps the contract price (and therefore loan amount, appraisal target, and property tax basis) higher.
• Forgetting the seller concession cap. Particularly on VA (4%) and low-down-payment conventional (3%) loans. Stack agent compensation on top of closing costs and you can blow the cap.
• Picking the agent your loan officer recommends without due diligence. They might be excellent. They might be a referral partner who books deals together. Verify independently — check their recent sales on the MLS or Zillow, ask for past-client references you can actually call.
• Trusting an agent who says “everyone in this market charges 3%.” Almost no statement in real estate has been less true since August 2024. If they won’t discuss the number, find someone who will.

Tools you’ll use

• Affordability — what you can actually afford with agent commission factored in
• Closing Cost Estimator — including seller concession caps
• Appraisal Gap Planner — if appraisal comes in low
• Mortgage Calculator — payment scenarios

For lender selection, see the choosing a lender guide. For broader financing context, see the first-time buyer guide.