Buyers Finally Have Leverage
What Changed After the NAR Settlement
In August 2024, the National Association of Realtors (NAR) settled a landmark antitrust lawsuit that fundamentally changed how buyer's agent commissions work in the United States. The headlines were loud, but the actual impact on buyers is what matters.
Here is what actually changed, and what it means for you.
The Old System, Briefly
For decades, when a home was listed on the MLS, the seller's agent would advertise a commission split—typically 5–6% of the sale price—that included compensation for the buyer's agent. The buyer never saw this negotiation. They just showed up, toured homes, and assumed their agent was "free."
In reality, the cost was baked into the price of the home. But because buyers didn't directly negotiate the fee, they had no leverage to demand better service or lower costs.
The New Rules
The settlement introduced two major changes that give buyers unprecedented control:
1. Written Agreements Are Mandatory
Before a buyer's broker can show you a house, you must sign a written representation agreement. This document must clearly state exactly what services the broker will provide and exactly how much they will be paid. You can no longer just casually tour houses with an agent without defining the relationship.
2. Commissions Are Negotiated Upfront
Sellers are no longer allowed to offer blanket buyer's agent compensation through the MLS. As a buyer, you negotiate your broker's fee directly. You agree on a percentage, a flat fee, or an hourly rate.
Does This Mean Buyers Have to Pay Out of Pocket?
Not necessarily. While you are responsible for negotiating the fee, you can still ask the seller to cover that cost as a concession in your offer. If the seller agrees, the money comes out of the proceeds of the sale, just like it used to. If the seller refuses, you must cover the gap.
Why This is Good for Buyers
This change forces transparency. You finally get to decide what representation is worth to you. If a broker wants to charge 3%, they have to prove they provide 3% worth of value. If they can't, you can negotiate the fee down or find someone else.
The settlement didn't make buying a house more expensive. It just made the costs visible. And visibility gives you power.
Actionable Steps
Refuse to sign before you interview. You do not have to sign a long-term representation agreement just to have an initial conversation or coffee with an agent. Interview them first.
Negotiate the fee. Buyer's broker commissions are not fixed by law and never have been. Ask what their fee is, what specific services it includes, and whether they offer flat-fee options.
Include an out clause. Ensure your buyer representation agreement includes a clear, no-penalty termination clause if the relationship isn't working out. Use ARRO to find brokers who offer transparent, buyer-friendly terms.
Frequently Asked Questions
Do I really need a buyer's broker now?
Yes. The seller has a professional negotiating on their behalf. If you don't have one, you are at a massive disadvantage. The settlement didn't eliminate the need for representation; it just changed how you pay for it.
Can I just use the seller's agent to save money?
Using the seller's agent (dual agency) is incredibly risky. They are legally bound to get the best deal for the seller. They cannot fully advocate for you or negotiate aggressively on your behalf.
What if I don't have the cash to pay my broker?
You can structure your offer to request that the seller cover your broker's fee as a seller concession. A good buyer's broker knows how to negotiate this into the contract so your out-of-pocket costs remain low.
Are commissions standard across the industry?
No. Commissions have always been negotiable, but the settlement makes that fact unavoidable. You can negotiate different fee structures based on the level of service you require.
How does ARRO help with this?
ARRO prepares you for these conversations. We educate you on the process, help you understand what a good broker actually does, and match you with vetted professionals who are transparent about their fees and services. ────────────────────────────────────────────────────────────
Haj Khalsa is the founder of ARRO, Creative Acorn, and HANGTIME — a Santa Fe-based outdoor lifestyle brand. He is also a rock climber, telemark skier, and dad.