The NAR Settlement’s Buyer Agreement Rule Is Fully In Effect — Here’s What Changed

ByPawli Paola Meyer

Every week, I sit across from buyers who have no idea their rights have changed. They’ve scheduled a showing, they’re excited about a house, and somewhere between the listing photos and the front door, nobody has told them that the rules governing how their agent gets paid — and what that agent actually owes them — are fundamentally different than they were two years ago.

The NAR settlement’s practice changes took effect August 17, 2024. That’s a year and a half ago. And yet buyer confusion remains high enough that I still get asked, at first meetings, whether the old commission structure is optional or negotiable. It isn’t optional anymore. It’s restructured.

Here’s what actually changed, and what it means if you’re buying or selling on Long Island right now.

A Quick Recap: What the NAR Settlement Actually Requires

The Sitzer/Burnett lawsuit — the case that ultimately led to the National Association of Realtors settling for $418 million — centered on a straightforward allegation: that NAR’s rules artificially inflated buyer agent commissions by requiring sellers to offer blanket compensation to buyers’ agents through the MLS. The settlement eliminated that requirement.

What replaced it: buyers must now enter into a written agreement with their agent before touring a home. That agreement must specify the agent’s compensation — the amount, how it’s calculated, and what it covers — in plain language. The days of a buyer’s agent compensation being buried in the seller’s listing agreement, invisible to the buyer and simply “built in” to the transaction, are over.

The rule applies to NAR members and participating MLSs across the country. In New York, where our local boards operate within this framework, the change is in full effect.

What “Written Buyer Agreement” Means in Plain English

A written buyer agreement is a contract. It is not a form, it is not a courtesy, and it is not optional under current rules. Before an agent can show you a home, they must have a signed agreement with you that lays out:

What services they will provide, what compensation they expect, whether that compensation can be covered by the seller (it can, if the seller agrees to it as part of the negotiation), and what happens if the compensation offered by the seller falls short of what you’ve agreed to pay.

That last point is where most buyers get tripped up. If you’ve agreed to a 2.5% buyer’s agent fee and the seller offers 2%, the difference is yours to cover — unless your agent negotiates otherwise. This is not hypothetical. It’s happening in transactions right now, and buyers who didn’t read the agreement are the ones getting surprised at the closing table.

The agreement also defines the scope of the representation. Some agreements cover a single property. Others are exclusive relationships for sixty or ninety days. The terms matter. Read them.

How This Changes the First Conversation Between Buyers and Agents

Before August 2024, a buyer could walk into an open house, talk to an agent, schedule a showing, and be halfway through the process before anyone had a frank conversation about compensation. That ambiguity benefited no one — including agents — but it was the norm.

Now, that conversation has to happen at the beginning. A buyer’s agent who wants to show you a property has to tell you, upfront and in writing, what they expect to be paid and how. That’s a better system. It’s also an uncomfortable system for agents who have never had to justify their compensation in concrete terms.

I’ll be direct: I consider this change an improvement. Transparency about what a broker earns is not something I’ve ever been reluctant to discuss. The agents and brokerages that are dragging their feet on this — burying the agreement in paperwork, glossing over the compensation section, or framing it as a technicality — are doing buyers a disservice.

If your buyer’s agent can’t clearly explain what they earn and why it’s worth it, that’s information.

What Sellers Need to Know About Buyer Agent Compensation Now

The settlement removed the requirement that sellers offer buyer agent compensation through the MLS. It did not remove the ability to do so. Sellers can still offer to cover the buyer’s agent fee as part of the deal — and many do, because it expands the buyer pool to include buyers who can’t or don’t want to pay their agent out of pocket.

What’s changed is that this offer is now negotiated explicitly rather than embedded in the listing structure. Sellers control whether they offer it, how much, and under what conditions. For sellers, this is leverage they didn’t technically have before — and a well-advised seller should understand it as such.

At Maison Pawli, when we list a property, we walk every seller through the compensation question in plain terms. What are you willing to offer to a buyer’s agent? What does that do to your net? How does it affect your pool of buyers? These are strategy questions, not boilerplate. Our 1% listing model makes this conversation even more specific, because our sellers already understand that commission structure isn’t fixed.

How Boutique Brokerages Like Maison Pawli Are Doing This Differently

The honest answer is that we’ve been doing the transparency piece for a while. The settlement formalized something that should have been standard practice: agents telling clients, in clear terms, what they’re earning and what the client is entitled to in return.

What I’ve noticed since the rule took effect is a divergence between the large franchise brokerages — where agents are often handling the new requirements as a compliance checkbox — and boutique practices where the conversation about compensation and representation was already happening organically. When I sit down with a buyer, we talk about what representation actually means: not just the showing and the offer, but the negotiation, the inspection navigation, the appraisal gap conversation, the closing timeline management. That’s what you’re paying for.

For buyers who want to understand the full picture of what the new agreement means before their first showing, our earlier post The New Buyer’s Agent Agreement: What Long Island Buyers Must Sign Before Their First Showing goes deeper on the practical mechanics.

The rule is in effect. The confusion is still clearing. If you’re heading into the market this summer, go in with your eyes open.

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This is for informational purposes only — consult a licensed real estate attorney for guidance specific to your transaction.

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Sources

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licensed Real Estate Broker. Check out my About page.

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