How did FTC 2024-2025 guidance or rulemaking change buyer-broker commission practices?
This fact-check may be outdated. Consider refreshing it to get the most current information.
Executive summary
The 2024–2025 rule changes—stemming from the National Association of Realtors (NAR) settlement and related industry rewrites—forced buyer‑broker compensation out of the Multiple Listing Service (MLS) spotlight and required written buyer‑agency agreements, shifting negotiation of buyer‑agent pay from implicit, seller‑funded splits to explicit, negotiated terms [1] [2]. Early empirical and industry reports show muddled, muted impacts: some commissions dipped briefly, others returned to near‑historic levels, and practical frictions have emerged for first‑time or cash‑constrained buyers [3] [4] [5].
1. What changed in rules and contracts
Under the settlement changes implemented in mid‑2024, MLS listings can no longer advertise offers of compensation to buyer brokers and buyer‑side agents must enter written agency agreements spelling out services and pay before work begins, effectively “decoupling” the automatic seller‑paid buyer commission that had been standard for decades [1] [2] [6]. Industry forms and association rules were updated to require that any offer of compensation originate from the seller or owner in writing, and brokers were instructed to facilitate—but not pre‑set—compensation arrangements [7] [2].
2. Intended purpose vs. real estate incentives
Proponents framed the changes as anti‑trust corrective and a transparency win: the settlement aimed to eliminate steering toward higher‑commission listings and to force market‑determined compensation that could lower costs for buyers [2] [1]. Economists and policy analysts suggested decoupling could spur competition and reduce commissions over time by making buyers negotiate fees with their agents [2]. Yet industry stakeholders warned that shifting payment responsibility could distort incentives, push inexperienced buyers into disadvantageous exclusive agreements, and create perverse outcomes where buyer agents prioritize listings with known seller compensation [5] [8].
3. Early market outcomes: mixed and modest
Empirical checks through 2024–mid‑2025 show modest and uneven change: Redfin and other brokerage analyses found buyer‑agent averages dipped briefly after the rule rollout but by Q2 2025 returned close to previous norms—roughly 2.4% nationally—with slight variation by price tier [3]. Bankrate and the Federal Reserve flagged that while theoretical models predict larger declines, observed effects have been “muted” so far and hard to project long‑run because brokers and markets have adapted in varied ways [4] [2]. Some markets with soft demand still see sellers voluntarily covering buyer compensation as a sales sweetener, while in hot markets buyers often must negotiate or pay directly [3] [5].
4. Practical frictions and distributional risks
Legal and practitioner guides flagged new operational burdens: buyers may now need to sign binding agreements before viewings, exposing inexperienced or cash‑strapped purchasers to exclusivity clauses, minimum terms, or flat/fee arrangements they might not fully understand [9] [8]. The Urban Institute and several consumer advocates argued the rules could lower fees overall but also warned savings might accrue more to sellers and higher‑value transactions, while first‑time and lower‑wealth buyers could be worse off if unable to pay out‑of‑pocket or negotiate effectively [1] [5].
5. Who benefits, who resists, and hidden agendas
Large brokerages and listing‑heavy markets have incentives to preserve negotiated seller offers because sellers covering buyer pay keeps price comparisons simple and incumbents’ revenue intact, which helps explain resistance and patchwork compliance across markets [3] [7]. Consumer advocates and the DOJ/FTC‑aligned plaintiffs pressed for systemic change to reduce apparent anticompetitive steering; trade groups and some agents framed the move as disruptive for consumers and small brokers, highlighting competing agendas between regulators seeking competition and industry actors protecting existing revenue flows [2] [10].
Conclusion: a structural tweak, not a revolution—yet
The rulemaking and settlement fundamentally rewrote the mechanics of how buyer‑agent compensation must be disclosed and negotiated, but market responses through 2025 have been incremental: adjustments in contract practice, localized seller choices to pay commissions as incentives, and commission rates largely hovering near historical norms as brokerages and agents find new ways to preserve revenue or pass costs—leaving the long‑term promise of substantially lower broker fees unresolved and dependent on enforcement, buyer education, and evolving business models [2] [3] [4].