New NAR Compensation Rules: What Buyers & Sellers Need to Know
The National Association of Realtors (NAR) has introduced new rules (effective Aug 2024) to bring more transparency and fairness to real estate transactions. While agent compensation has always been negotiable, these updates clarify how commissions are handled.
What’s Changed?
1) Buyer Agent Compensation Is No Longer Advertised in the MLS
- Sellers can still offer compensation to the buyer’s agent, but it won’t be displayed in the MLS.
2) Buyers Must Now Sign a Buyer Representation Agreement
- This is a legal contract outlining:
- ✅ The agent’s services & responsibilities
- ✅ The buyer’s obligations
- ✅ How much the buyer’s agent will be compensated.
How This Affects Buyers
- Previously, buyers worked with their agents based on a handshake agreement. Now, a signed Buyer Representation Agreement is required.
- Sellers traditionally cover the buyer’s agent’s fee, and this is still the norm in most cases.
When Sellers Don’t Offer Full Buyer Agent Compensation
If a seller offers less compensation than what’s stated in the Buyer Representation Agreement, buyers would cover the difference—often by adjusting their offer price.
🔹 Example:
- Home price: $1,000,000
- Buyer-Agent Agreement: 2.5% commission
- Seller offers 2.0% commission
- The buyer could adjust their offer to $995,000 to make up the 0.5% difference.
Why Sellers Should Still Offer Buyer Agent Compensation
Over 80% of buyers work with an agent—offering compensation helps attract more buyers and streamlines the sale.
Top Benefits for Sellers:
- ✔️ More Buyer Interest – Buyers are more likely to view and consider your home.
- ✔️ Easier for Buyers to Afford – Including agent compensation in the sale price means buyers don’t have to pay out-of-pocket.
- ✔️ Fewer Unqualified Showings – If buyers must pay their agent separately, they may overestimate their budget.
Seller Advantage:
Offering buyer agent compensation upfront helps attract serious, qualified buyers and gives you a clearer picture of your net proceeds from the sale.
Bottom Line
These new NAR rules change how commissions are handled, but sellers can still offer buyer agent compensation—and it remains a strong strategy to attract buyers.
Ready to learn how to be successful buying or selling a home this year?
Read: My Advice for Buying a Home This Year
Read: My Advice for Selling a Home This Year
