What Changed With Real Estate Commissions — and What It Means for You
If you've bought or sold a home in the last year, you may have noticed something different about the paperwork and the conversation around agent fees. That's not an accident. In 2024, a landmark legal settlement involving the National Association of Realtors (NAR) changed the rules around how real estate agent commissions work in the U.S. — and the effects are still rippling through the industry.
Here's what actually changed, what it means for buyers and sellers in the Manhattan, KS area, and what you should expect when working with an agent today.
What Was the NAR Settlement?
In 2024, NAR agreed to a $418 million settlement resolving a lawsuit that alleged the traditional commission structure — where sellers were required to offer compensation to buyer's agents through the MLS — artificially inflated agent fees. The settlement introduced new rules that took effect in August 2024.
The Two Biggest Rule Changes
1. Sellers no longer advertise buyer's agent compensation on the MLS. Under the old system, a seller's listing on the MLS would typically include an offer of compensation to the buyer's agent — often 2.5–3%. That offer is now gone from MLS listings. Sellers can still choose to offer compensation to a buyer's agent, but it has to be negotiated outside of the MLS.
2. Buyers must sign a written agreement with their agent before touring homes. Before your agent can show you a single property, you're now required to sign a Buyer Representation Agreement. This document spells out exactly what services your agent will provide and what they'll be paid — and it has to state a specific amount or rate, not a vague range. The agreement must also confirm that commission rates are fully negotiable and not set by law.
What This Actually Means for Buyers
The intent of the rule change was to make agent compensation more transparent — and to some degree, it has. You now know upfront what your agent expects to be paid before you step inside a single house.
In practice, though, most buyers are not ending up out of pocket for their agent's fee. Here's why: sellers in most markets — including Manhattan, KS — still have strong incentive to offer compensation to buyer's agents. A home that's effectively inaccessible to buyers working with agents is a home that sits longer on the market. So while the MLS offer is gone, many sellers continue to negotiate buyer's agent compensation as part of the transaction.
What you should do as a buyer: read your Buyer Representation Agreement carefully before signing. Make sure you understand what your agent will be paid and whether you'd be responsible for any portion of it if the seller declines to cover it.
What This Actually Means for Sellers
You have more flexibility than before — but that doesn't necessarily mean you should use it to cut buyer's agent compensation out of the deal.
Sellers who refuse to offer any buyer's agent compensation may find their home gets fewer showings, especially among buyers who can't or won't pay their agent's fee separately. In a market where homes are already sitting longer and buyers have more leverage, that's a risk worth thinking through carefully.
The smarter move for most sellers: work with your agent to determine a compensation strategy that keeps your home competitive. It doesn't have to be 3% — but zero may cost you more in time on market than it saves you in fees.
The Surprise: Commissions Have Gone Up, Not Down
When the settlement was announced, many people predicted it would drive agent commissions down significantly. A year in, the data tells a different story. Buyer's agent commissions have actually rebounded to around 2.82% — back near pre-settlement levels — as buyers and sellers navigate the new rules and agents demonstrate the value they bring to a transaction.
The market, it turns out, doesn't eliminate agent compensation just because the rules change. It prices that compensation based on what buyers and sellers are willing to pay for the service.
The Bottom Line
The NAR settlement made real estate commissions more transparent and more negotiable — which is a good thing for consumers. But the fundamentals of a real estate transaction haven't changed: having an experienced, knowledgeable agent in your corner still makes a measurable difference in what you pay, what you get, and how smoothly everything goes.
At The Alms Group, we're happy to walk you through exactly how compensation works before you sign anything. No surprises, no fine print you didn't see coming.
