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In March 2024, after the National Association of Realtors (NAR) agreed to a landmark $418 million class action settlement, home sellers expected they would soon pay far less in real estate commissions. However, since the new rules went into effect in August 2024, reports suggest that real estate agents have found ways around them, effectively thwarting that from happening.
Key Takeaways
- Historically, home sellers have had to pay both their agent and the buyer’s agent.
- New rules starting in August 2024 were to have made buyers responsible for paying their agent, theoretically lowering costs for sellers.
- However, evidence to date shows that little has changed.
How the Rules on Commissions Changed
Under the old rules, home sellers were responsible for paying both their real estate agent and any agent the buyer brought into the deal. Often, that meant paying 5% or 6% in total, typically split 50-50 between the two agents, with each getting 2.5% or 3%. On a $500,000 sale with a 6% commission, for example, the seller would have to fork over $30,000, with $15,000 going to each agent.
Under the new rules, sellers will still have to pay their agent, typically as a percentage of the sale price. But buyers will be largely responsible for compensating their own agents, in the form of a percentage, an hourly rate, or a flat fee. Using the example above, a seller who negotiated a 3% commission with their agent and paid the buyer’s agent nothing would save $15,000. (In some cases, sellers might still want to help a buyer cover at least a portion of the cost as an incentive, but doing so would be voluntary.)
Important
Real estate commissions aren’t tax deductible, but sellers can include them as “selling expenses” in their cost basis to reduce any taxable capital gain on the sale.
Why the New Rules Haven’t Delivered the Expected Savings
A key change in the new rules prohibited sellers’ agents from offering to split their commissions with buyers’ agents via multiple listing services (MLS), the exclusive databases of available homes run by local agent groups. But agents soon found a workaround, communicating instead by phone, email, and other means, The New York Times reported in March 2025.
“Many agents, now banned from making offers of commission to each other on private Realtor-only databases, are not adapting to the intent of the settlement,” the Times reported. “Rather than encouraging buyers to now negotiate rates on their own, they continue to press sellers to offer commissions of 5% or 6%, and then discuss commission splits among themselves.”
As a possible result, sellers’ commissions appear to have barely budged, dropping from 5.64% to 4.96% on average after new rules went into effect, according to a RISMedia survey cited by the Times. A study for the real estate listing site Redfin found that many sellers continue to pay all or part of the buyer’s agent’s commission, although negotiations over that issue have also become more frequent.
Tip
If, after selling your home, you need a new mortgage, it can be a good idea to shop around to get the best rate.
The Bottom Line
The new rules on real estate agent commissions have had far less effect than originally predicted, possibly because many sellers and buyers are unaware of them or the leverage they provide.
“The class action settlement, for the first time, effectively allows buyers to negotiate their agent’s compensation,” the Consumer Federation of America has noted. “Buyers should take the opportunity to do so, setting a goal in dollar terms of two percent (of home sale price) or less. And so should sellers, who have had the same opportunity but frequently have decided not to pursue it.”
