If you started a prelicense course recently, you have probably heard about "the NAR settlement" in class, in the news or from agents you know. Some of what you hear is accurate, and some is exaggerated. Since new licensees will spend their whole careers under these rules, it is worth understanding what actually changed.
This post covers the practice changes that took effect in August 2024 and what they mean for your day-to-day work. It is general information, not legal advice. Your brokerage's policies and your state's law control how these rules apply to you.
Key takeaways
- Practice changes from the National Association of REALTORS® settlement took effect August 17, 2024.
- Offers of compensation to buyer brokers can no longer be communicated through the MLS. Compensation can still be negotiated and agreed to outside the MLS.
- MLS participants working with buyers must have a written agreement with the buyer before touring a home.
- Those agreements must state the agent's compensation in a specific, objectively ascertainable way and say that fees are not set by law and are fully negotiable.
- Commissions were negotiable before the settlement and still are. State law may add requirements, so follow your broker and your state's rules.
What the settlement was
In March 2024, NAR announced an agreement to settle nationwide litigation brought by home sellers over broker commission rules. The lawsuits challenged rules connected to how buyer-broker compensation was offered through multiple listing services. As part of the settlement, NAR agreed to change several practice rules for its members and for MLSs owned by NAR-affiliated associations. Those changes took effect on August 17, 2024, and the court gave final approval to the settlement in November 2024 (NAR, "The Facts").
The settlement did not create a new law or set commission rates. It changed the rules for NAR members and NAR-affiliated MLSs. Many MLSs not affiliated with NAR adopted similar policies, and some states have their own laws on buyer representation, so the exact rules you follow depend on where you practice.
Change 1: No offers of compensation on the MLS
Before August 2024, listing brokers commonly posted an offer of compensation to cooperating buyer brokers in the MLS listing. A buyer's agent could look up a listing and see what the listing side was offering to pay.
Under the new rules:
- Offers of compensation to buyer brokers may not be communicated on the MLS.
- NAR also eliminated the requirement that listing brokers make an offer of compensation to buyer brokers as a condition of using the MLS.
- Compensation can still be offered and negotiated outside the MLS. A seller may still agree to pay some or all of a buyer's broker's fee, and buyers may ask for that in their offer.
- Sellers can still offer concessions to buyers, such as help with closing costs, as part of a transaction.
What this means for you: You can't rely on the MLS to tell you what a listing will pay your buyer's side. Compensation for buyer representation becomes part of the conversation with your buyer up front and, often, part of the negotiation on an offer. Your broker will have a process for this. Learn it before you show your first home.
Change 2: Written buyer agreements before touring
This is the change that affects new agents most directly.
Under the settlement rules, MLS participants working with a buyer must enter into a written agreement with that buyer before touring a home. According to NAR, this applies to in-person tours and to live virtual tours. It does not apply to a buyer who simply walks into an open house or to a conversation where you are only introducing yourself and your services (NAR, "The Facts").
The written agreement must:
- State the amount or rate of compensation the agent will receive, or how it will be determined, in a way that is objectively ascertainable and not open-ended. "Whatever the seller offers" does not meet this standard.
- Prevent the agent from receiving more compensation from any source than the amount or rate in the agreement.
- Include a conspicuous statement that broker fees and commissions are not set by law and are fully negotiable.
Buyer agreements don't all look the same
NAR's rules set minimum terms. They don't require one specific form or one type of relationship. Depending on your state and brokerage, a written buyer agreement might be:
- A full exclusive buyer representation agreement
- A shorter, limited agreement covering a set period or a specific property
- A non-exclusive agreement
The forms your brokerage uses, how long they last and what duties they create depend on your state's agency law and your broker's policies. Some states already required written buyer agreements by statute before the settlement, and others have since changed their laws. Use the forms your broker gives you and follow your state's rules.
How to explain it to buyers
New agents often worry that asking for a signature before a first showing will scare buyers away. Practical approaches agents use include:
- Explaining what you do. Describe the services you provide, from market research to negotiation and contract-to-close coordination.
- Being clear about compensation. Explain what the agreement says you will be paid, who might pay it and that it is negotiable.
- Explaining that it's the rule. This is a standard requirement for MLS participants, not something you invented.
- Offering choices. If your brokerage permits limited or short-term agreements, explain the options.
What did not change
Several things are often misreported. Here is what stayed the same:
- Commissions were already negotiable. The settlement emphasizes this, but it did not make commissions negotiable for the first time.
- There is no standard commission rate. No law or NAR rule sets one, before or after the settlement.
- Sellers may still pay buyer brokers. The change is in how offers are communicated (not on the MLS), not whether they can be made.
- Your fiduciary and agency duties still come from state law. Disclosure, loyalty, confidentiality and fair housing obligations are unchanged.
Why it matters for the license exam
Exam content is set by each state and its testing vendor, and the timing of any updates varies. Even so, the concepts behind these changes have long been part of exam material:
- Agency and buyer representation: who you represent, when the relationship begins and what you owe a client compared with a customer
- Compensation and negotiability: that commissions are negotiated between the parties and not set by law or by any trade association
- Antitrust: price-fixing, group boycotts and why agents must never discuss "standard" commissions with competitors
- Written agreements: what makes a listing or buyer agreement enforceable in your state
If you see a question about who decides a commission rate, the answer is the parties to the agreement. It is never the MLS, a trade association or the state. That was true before the settlement, and it is true now.
Your first steps as a new licensee
- Ask your broker for the brokerage's buyer agreement forms and training before you work with buyers.
- Learn your state's agency disclosure rules, which may require separate forms and timing.
- Practice your explanation of buyer representation and compensation until it feels natural.
- Document everything. Keep signed agreements and disclosures in the file according to your broker's policy.
- Stay current. Rules and guidance in this area continue to evolve, through court decisions, state legislation and MLS policy updates.
Keep learning the fundamentals
The settlement changed how some conversations happen, but the core of the job did not change: understand agency, disclose properly, negotiate honestly and follow the law. Those are the same skills your license exam tests.
Brush up on agency, antitrust and compensation terms in the glossary. Run commission scenarios with the commission calculator, then test yourself with timed practice tests. Your state's guide, such as New Jersey or Texas, covers your state's exam format and rules. Full state question banks are available on REEX Prep plans.