When you sell your house, the costs can add up quickly — and one of the biggest expenses is often real estate commissions.
Over the years those commissions ballooned to inflated levels, sparking lawsuits over whether the industry kept rates artificially high. That’s what led to a major National Association of Realtors (NAR) settlement in 2024.
The $418 million settlement was intended to bring more transparency and lower costs for sellers. But nearly a year later, the changes aren’t having the widespread impact many had hoped for.
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What the NAR settlement changed
In March 2024, the National Association of Realtors (NAR) denied wrongdoing but agreed to a $418 million settlement. The NAR and other real estate companies, including RE/MAX, Real Estate One and Seven Gables, allegedly artificially inflated real estate agent commissions on home sales and purchases.
The NAR settlement was meant to tackle inflated real estate commissions. Traditionally, when a house was sold, commissions averaged 5% to 6% of the sale price. On a $400,000 home, that meant as much as $24,000 in fees — and sellers were usually responsible for paying both their own agent and the buyer’s agent.
Adding to the lack of transparency, most states didn’t require buyers to sign an agreement with the agent representing them. As a result, many buyers had no idea how much their agent was being paid from the transaction when they purchased a home.
The lawsuit alleged that NAR conspired to keep real estate commissions artificially high. As part of the $418 million settlement, the association also agreed to change how commissions are handled in home sales.
Under the new rules, sellers no longer have to specify a commission for the buyer’s agent — a shift designed to encourage more negotiation and potentially lower costs. In addition, listing agents can’t advertise commission splits on the Multiple Listing Service (MLS). Instead, sellers now negotiate fees directly with their own agent and decide whether, and how much, to contribute toward the buyer’s agent’s fees.
The settlement also introduced a new requirement for buyers: they must sign an agreement with their real estate agent outlining exactly how much they’ll pay for the agent’s services. Depending on the terms, that commission could come from either the buyer or the seller.
This change opens the door to more flexibility. Sellers may choose not to cover the buyer’s agent’s fee, leaving buyers to pay it directly. At the same time, some agents are now more willing to negotiate, offering flat fees for marketing a home or reduced commissions if buyers take on tasks like searching for properties themselves or attending open houses on their own.
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How the NAR settlement actually affected real estate
The new rules went into effect on August 17, 2024. Nearly a year later, though the settlement was intended to drive down costs and increase transparency around commissions, most sellers haven’t seen a significant decrease in commissions.
A Redfin analysis found that average buyer’s agent commissions barely budged after the new rules took effect. In October 2024, the rate was 2.34%, nearly identical to 2.35% in August. By the first quarter of 2025, commissions had actually ticked up to 2.40%, compared with 2.37% in late 2024 and 2.36% in the previous quarter.
In fact, commissions have inched higher for homes priced under $1 million. For sales between $500,000 and $999,999, the average buyer’s agent commission rose to 2.29% in the first quarter of 2025, up from 2.26% in late 2024.
Homes under $500,000 saw an even bigger jump, climbing to 2.49% from 2.46% in the fourth quarter and 2.42% in the third.
Why commissions haven’t come down
The settlement’s policy changes sounded promising, but they haven’t had much impact in practice. Real estate agents don’t operate with a fixed pay structure, yet many are still accustomed to the traditional model and have been slow to adopt new approaches.
Another hurdle is awareness. Most people don’t buy or sell homes often enough to stay current on industry best practices. That’s why having a strong team of professionals — from your real estate agent to your mortgage lender and insurance advisor — is key to navigating the process and making sure you’re not leaving money on the table.
Know what you’re paying for
If you’re planning to sell a house, discuss fees with your real estate agent at the beginning of the process, and make sure you sign a document outlining those fees. This is also the time to discuss whether you’ll be responsible for the buyer’s agent’s fees, and what those may be.
Your real estate agent should welcome your questions and be able to clearly explain every part of the process of buying or selling a home. They’re your partner in this journey, so find an agent you’re comfortable with and whom you can trust.
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