Buyer’s Agent Compensation Rules After the NAR Settlement

Buyer’s agent compensation after the NAR settlement works differently than it did before August 17, 2024. Offers of compensation no longer appear on Multiple Listing Services, and you must sign a written agreement with your buyer’s agent, spelling out exactly what that agent will earn, before the two of you tour a home together. The fee itself can still be covered by the seller, by the listing broker through private negotiation, or by you directly, but nothing about it is automatic anymore. It is a negotiated line item in every transaction.¹

Before the settlement, listings on the MLS typically advertised a commission to whichever agent brought the buyer, and most buyers never saw the number. That advertising is gone. No MLS may accept a listing that offers compensation to buyer brokers, and no MLS data feed may be used to build a workaround platform for the same purpose.¹ Sellers can still agree to pay a buyer’s agent, but the arrangement has to be worked out deal by deal.

The Written Agreement You Sign Before Touring

Any agent affiliated with an MLS-participating brokerage must have a signed written agreement with you before showing you a home. The agreement must state the agent’s compensation in objective terms: a specific dollar amount, a flat fee, a percentage, or an hourly rate. Vague or open-ended language is not permitted.²

One clause in that agreement is especially worth understanding. The contract must prevent your agent from receiving compensation from any source that exceeds what you agreed to pay.² If you agree to 2% and a seller quietly offers 3%, the extra point cannot go to your agent. That protection sits inside the required contract language, not a separate document.

Duration is negotiable, and short is safer than long. Agreements commonly run 30 to 90 days. You can also negotiate the geographic area, price range, and scope of services the contract covers.³ Everything in the document is open to discussion before you sign.

Protection Periods and Termination

Most buyer representation agreements include a protection period, sometimes called a holdover clause, that outlives the contract itself. If the agent showed you a specific property during the term of the agreement and you then buy that property after the agreement expires, the protection period may still require you to pay the commission. These clauses typically run 30 to 90 days after termination. The protection usually falls away if you sign a new exclusive agreement with a different agent, since the new agent then earns the commission.

Read the protection language carefully. There is a meaningful difference between a clause that covers homes the agent personally showed you and one that covers any property you found during the term of the agreement. The broader version puts more exposure on you.

Termination rights vary. Some agreements allow either party to end the contract with written notice; others require cause. Ask how termination works before signing, and treat a shorter initial term as a lower-risk way to evaluate the agent.

Open Houses Are Outside the Rule

The written agreement requirement does not apply when you walk into an open house on your own. The agent hosting an open house works for the listing broker or the seller, not for you. The moment you ask an agent to arrange a private showing for you, whether in person or as a live virtual tour, expect to sign first.⁴

Negotiating the Fee

No law sets real estate commissions, and no trade association or MLS can dictate a rate. Every fee is negotiable, and post-settlement, that negotiation is visible to you rather than buried in the listing.⁵

The common structures:

A percentage of the sale price. Market data from late 2025 shows average buyer’s agent commissions near 2.4%, with homes under $500,000 sometimes carrying slightly higher percentages and homes above $1 million often coming in around 2.2%.
A flat fee, fixed regardless of sale price. This works when you have a clear sense of what you want and don’t need extensive hand-holding.
An hourly rate for specific tasks like coordinating tours, reviewing disclosures, or preparing offer documents. Cost is less predictable, but you pay only for time actually spent.

Negotiate at the initial interview, before you sign anything and before any tours happen. Ask exactly what is included at the quoted rate. A lower percentage may not include attending inspections or coordinating with your lender; a higher rate may cover every detail through closing. The cheapest option is not the best deal if you end up doing work you thought the agent would handle.

Three Ways the Fee Actually Gets Paid

The money reaches your agent’s brokerage in one of three ways, or a combination.

You Pay Directly at Closing

You bring the fee to the closing table alongside your other closing costs. This requires liquid funds beyond your down payment and needs to be budgeted early. The upside is control and simplicity: no dependence on the seller and no dependence on whether the listing broker is offering anything.

Seller Concessions

You ask the seller, inside the purchase offer, to contribute toward your closing costs, and you apply that credit to your agent’s fee. The seller is not paying your agent directly; the seller is giving you a credit that you then use for the commission. This is the most common workaround for buyers who lack the cash to pay separately.

Seller concessions have caps tied to your loan and down payment. For conventional loans backed by Fannie Mae:

With a down payment under 10% (LTV above 90%), concessions are capped at 3% of the sale price or appraised value, whichever is lower.
With 10 to 25% down (LTV 75.01 to 90%), the cap is 6%.
With more than 25% down (LTV 75% or less), the cap is 9%.

⁶

If you put 5% down on a $400,000 home, the seller can contribute up to $12,000. A 2.5% buyer’s agent commission of $10,000 fits, but there’s not much room for other costs. Concessions above the cap must be deducted from the sale price for underwriting.⁶

Listing Broker Offers Compensation Privately

Even though the MLS can no longer broadcast it, a listing broker can still agree to pay your agent through direct negotiation. Your agent contacts the listing side and asks. If the offer covers your full fee, you owe nothing additional. If it covers only part, you’re responsible for the difference. Many sellers still price the property with buyer-side compensation in mind because doing so helps attract offers. Get any listing-side offer confirmed in writing before you finalize your purchase contract.

Loan-Type Rules That Affect Who Can Pay

Conventional Loans

When a seller pays a buyer’s agent commission consistent with local common and customary practice, Fannie Mae and Freddie Mac do not count that payment toward the interested party contribution caps described above.⁶ Because sellers have historically paid these commissions in most U.S. markets, the practice can continue without triggering the caps.

FHA Loans

FHA takes a similar position. When a seller pays your agent’s fee in a manner consistent with state and local custom, and the amount is reasonable, FHA does not treat it as an interested party contribution.⁷ FHA’s general 6% seller concession cap does not swallow customarily paid commissions. FHA borrowers may also pay their own agent directly, provided the lender confirms sufficient funds for the fee and other closing costs.

VA Loans

The VA issued a temporary policy allowing veterans to pay their own buyer’s agent reasonable and customary fees. Previously, veterans were generally prohibited from paying buyer broker commissions, so this is a real change. The fee cannot be rolled into the loan amount, meaning the veteran needs cash for it at closing. When the seller pays a veteran’s buyer’s agent fee instead, the VA does not treat that payment as a seller concession. The VA also treats the buyer representation agreement as part of the loan file, so your lender will upload it when ordering the appraisal.⁸ Keep a signed copy handy.

Building Compensation Into the Offer and Checking It at Closing

When you find a home, the compensation terms go directly into the purchase contract. If you need help covering the fee, the offer includes a request for a specific dollar amount or percentage as a seller concession, sitting alongside the price, closing date, and contingencies. The seller can accept, counter, or reject that request.

Before submitting, your agent should ask the listing side whether any compensation is being offered privately. If the listing broker is willing to cover some or all of your agent’s fee, you can reduce or drop the concession request, which can make your offer more competitive.

Every compensation figure appears on the Closing Disclosure, which your lender must deliver at least three business days before closing.⁹ Section H breaks out real estate commissions by brokerage.¹⁰ Compare those numbers to your buyer representation agreement and your purchase contract. Raise any discrepancy with the settlement agent during the three-day window; corrections after closing are much harder.

Tax Basis for Fees You Pay Yourself

If you pay your agent’s commission directly instead of the seller paying it, that cost adds to your home’s tax basis. The IRS treats settlement fees and closing costs paid by the buyer, including sales commissions, as part of the property’s basis.¹¹ A higher basis reduces your taxable gain when you sell.

For most primary-residence sellers, the $250,000 single or $500,000 married capital gains exclusion means this never matters. But if the home appreciates well beyond those thresholds, or if you convert it to a rental, the basis boost from a buyer-paid commission can be worth real money. Keep the closing statement and buyer representation agreement in your tax records for as long as you own the property, and for at least three years after you sell it.

1
National Association of REALTORS®. Summary of 2024 MLS Changes
2
National Association of REALTORS®. What the NAR Settlement Means for Home Buyers and Sellers
3
National Association of REALTORS®. Consumer Guide to Written Buyer Agreements
4
National Association of REALTORS®. Consumer Guide to Open Houses and Written Agreements
5
Federal Trade Commission. Guide to Antitrust Laws
6
Fannie Mae. Interested Party Contributions (IPCs)
7
U.S. Department of Housing and Urban Development. FHA INFO 2024-12 – FAQ on Seller-Paid Commissions Related to NAR Settlement
8
Department of Veterans Affairs. Circular 26-24-14 – Temporary Local Variance for Certain Buyer-Broker Charges
9
eCFR. 12 CFR 1026.19 – Certain Mortgage Transaction Disclosures
10
Consumer Financial Protection Bureau. 12 CFR 1026.38 – Content of Disclosures for Certain Mortgage Transactions (Closing Disclosure)
11
Internal Revenue Service. Publication 551 – Basis of Assets