Buyer Broker Agreements After the NAR Settlement

Since August 17, 2024, a real estate agent who belongs to a multiple listing service (MLS) must sign a written agreement with you before showing you a home, and that agreement has to say exactly how much the agent will be paid. The seller may still pay some or all of that fee, but nothing guarantees it, so you need to know what you have agreed to before you tour.

These rules come from practice changes the National Association of REALTORS® (NAR) adopted to settle the commission lawsuits. Here is what changed, what the agreement must contain, and how to negotiate it.

What changed on August 17, 2024

Two rules changed how buyers and their agents deal with each other.

1. A written agreement comes before the first tour

An MLS participant who is working with a buyer must have a signed written agreement before touring a home with that buyer. That covers in-person showings and live virtual tours. NAR says no agreement is needed just to talk to an agent at an open house or to ask about their services.

2. Buyer-agent pay no longer appears on the MLS

Before the settlement, listings on the MLS commonly showed what the seller’s broker would pay a cooperating buyer’s broker. That offer of compensation is no longer allowed on MLS platforms. Sellers can still offer to pay a buyer’s agent through other channels (for example, by telling agents directly or in an offer negotiation), and sellers can still advertise buyer concessions, such as help with closing costs, on the MLS.

1. March 15, 2024

   NAR announces settlement

   The agreement resolves seller claims against NAR, subject to court approval, and includes new practice rules.

2. August 17, 2024

   Practice changes take effect

   Written buyer agreements required before touring; MLS offers of compensation removed.

3. November 2024

   DOJ statement of interest

   The US Justice Department told the court in the Sitzer/Burnett case that the buyer-agreement requirement raises antitrust concerns and asked that approval not be read as giving it immunity. The requirement remains part of NAR’s rules.

4. Now

   Your agreement sets the pay

   Whatever you sign is the most your agent may receive from any source.

What every written buyer agreement must say

Under the settlement terms NAR published, the agreement must:

1. 1

   State the amount or rate of compensation clearly

   The agreement must specifically and conspicuously disclose what the agent will be paid, or exactly how that pay is determined.
2. 2

   Use an objective number

   The pay must be objectively ascertainable, such as a flat fee, a percentage of the price, an hourly rate or $0. Open-ended terms like “whatever the seller offers” are not allowed.
3. 3

   Cap the agent’s pay

   The agent may not receive compensation from any source (seller, listing broker or you) that exceeds the amount or rate in the agreement.
4. 4

   Say commissions are negotiable

   It must include a conspicuous statement that broker fees and commissions are not set by law and are fully negotiable.

NAR does not dictate the other terms. Its guidance lists the length of the agreement (one day, one month, one house, one ZIP code), whether it is exclusive or non-exclusive, and the type and amount of pay as things you and the agent decide. That means you can ask for a short, single-property touring agreement before you commit to a long exclusive one.

Who pays the buyer’s agent now?

The agreement you sign sets what your agent earns. Where that money comes from is a separate question, and there are three common outcomes:

NAR’s guidance to agents says buyers may ask the seller to pay the buyer’s broker as part of the offer, even if the seller has not offered anything, and that not all sellers will agree. Agents must not steer you away from homes based on whether a seller offers compensation, and they must not amend your agreement just to “match” a bigger seller offer.

Seller concessions and your loan

If you ask the seller for a credit toward your costs, your lender’s rules can cap it. For a Fannie Mae loan on a principal residence or second home, seller and other interested-party contributions are limited to 3% of the price or appraised value (whichever is lower) when your loan-to-value ratio is above 90%, 6% between 75.01% and 90%, and 9% at 75% or below. Investment properties are capped at 2%. Ask your lender how a seller payment to your broker will be treated before you write it into the contract. See our seller concessions calculator to run the limits.

Reading the agreement before you sign

Ask for the agreement in writing before the first showing and look for these points:

• The pay line. Is it a percentage, a flat fee or hourly? If it is a percentage, of what price? A 2% fee on a $900,000 apartment is $18,000.
• What happens if the seller pays less. Most agreements say you owe the difference. If you do not want that, negotiate a clause that limits your fee to what the seller pays, or a lower flat fee.
• Length and scope. Shorter is safer while you are deciding whether you like working with the agent. Check whether it covers one address, an area or every home you buy.
• Exclusivity. An exclusive agreement can mean you owe the fee even if you buy a home you found yourself, or through a different agent, during the term.
• Tail period. Some agreements keep you liable for the fee if you buy a home the agent showed you within a set time after the agreement ends.
• Retainers. If there is an upfront fee, check whether it is refundable and whether it counts toward the final fee.
• How to end it. Look for a cancellation clause and what notice it needs.

Negotiating your agent’s fee

Because the agreement must state that commissions are negotiable, you can ask for a different structure. Common options:

• A flat fee instead of a percentage, which keeps the cost the same if you buy a pricier home.
• A lower rate in exchange for doing more of the search yourself.
• A fee capped at whatever the seller agrees to pay, so you pay nothing out of pocket. Agents may decline this.
• A single-property agreement if you only need help on one home you already found.

Compare two or three agents. Ask each one what services the fee covers: pricing research, offer strategy, co-op board package help, coordinating inspections and appraisals, and attending closing. Then budget for the fee as a possible closing cost with the NYC closing cost calculator.

If you do not want a buyer’s agent

You can buy without one. You can contact the listing agent directly, attend open houses without signing anything, and use an attorney for the contract. Remember that the listing agent represents the seller unless you both consent in writing to dual agency. You can also look at homes listed directly by owners on Roofy’s for-sale listings.

Quick answers

Do buyers pay realtor commission now?

Sometimes. You are responsible for what your agreement says. Many sellers still agree to cover some or all of the buyer’s agent fee, but it is now negotiated deal by deal rather than shown on the MLS.

Can an agent show me a home without an agreement?

An MLS participant working with you cannot tour a home with you without a signed agreement. An open house is different: you can walk in and talk to the agent without signing.

Can my agent take a bonus from the seller?

No. The agent cannot receive more than the amount or rate in your agreement from any source.

This guide is general information, not legal advice. For the full process, read how to buy a home in NYC and real estate commissions after the NAR settlement.