What are the new real estate commission rules for 2025?
Executive summary
New commission rules that flowed from a $418 million settlement with the National Association of Realtors (NAR) took effect in August 2024 and primarily ban listing agents from posting buyer‑agent commission offers on MLS systems and require written buyer representation agreements in many places; those changes aim to shift negotiation of buyer compensation onto buyers and their brokers rather than having sellers automatically pay both sides [1] [2] [3]. Early 2025 data show only modest movement in actual buyer‑agent rates — Redfin and other analyses find average buyer‑agent commissions roughly in the mid‑2% range, with small variation by price tier (about 2.43% nationally in Q2 2025 per Redfin) and signs that agents and brokerages are experimenting with flat‑fee and alternative models [4] [5] [6].
1. What the new rules actually change: the mechanics
The settlement’s central, enforceable change removed the longstanding practice of listing the buyer‑broker compensation on MLS entries, effectively prohibiting sellers (through their listing brokers) from using the MLS to offer a split to a buyer’s agent; that forces buyer‑agent compensation to be negotiated directly between buyers and their brokers or separately with sellers rather than being an automatic line item visible to all brokers on the MLS [1] [7]. The settlement also has led to requirements in many states that buyer representation be memorialized in a written agreement before property showings, shifting the moment and manner of compensation decisions into explicit contracts between buyers and agents [3] [8].
2. Intended aims versus real‑world logic
The legal and regulatory intent was to give consumers clearer choice and to reduce any implicit pressure on sellers to pay a buyer’s agent by default, thereby encouraging competition and potential price declines in commissions over time [1] [2]. Supporters framed it as increasing transparency and creating a market for lower‑cost brokerage models; critics worried it would force buyers to pay up front, create confusion, or reduce buyer‑agent income and service levels in some markets [2] [3].
3. Early market outcomes: modest change, notable workarounds
Multiple outlets reporting through mid‑2025 find that commission percentages moved only slightly: Redfin reports buyer‑agent averages near 2.43% in Q2 2025 (up from some quarters) with variation by price band (for sub‑$500k homes a small increase, for $1M+ homes a small decline), and Bankrate and other journalists say overall effects have been muted so far [5] [4] [9]. Investigations show agents sometimes avoid the spirit of the rule by negotiating or communicating commission splits off‑MLS (phone, email, private messaging), a dynamic critics say undermines the settlement’s goals [7].
4. New business models and competitive pressure
The rule change created market space for lower‑fee alternatives: flat‑fee brokers and discount brokerages report increased interest from buyers and sellers looking to cut costs, and commentators note that traditional agents argue their higher fees reflect service and local expertise [6]. Industry analyses and trade blogs predict a mix of responses: renegotiated splits, flat fees, performance‑based pay, and written service packages — with some brokerages planning revenue diversification to protect margins [8] [6].
5. What consumers must do now to protect themselves
Because MLS listings no longer display buyer‑agent compensation and written buyer agreements are increasingly common, buyers must proactively ask about fees and sign explicit buyer‑broker agreements before touring homes; sellers should confirm in their listing agreements whether they will offer compensation to a buyer’s agent or leave that negotiation to buyers directly [3] [10]. Several consumer guides urge buyers to shop for agents much like other professionals — comparing rates, services, and contract terms [11].
6. Limits of current reporting and open questions
Available sources document rule text, state adoption of written agreement requirements in many places, and early market data up to mid‑2025, but they do not conclusively show long‑term national shifts in total commission dollars or service quality; some outlets report that commissions “haven’t changed much” while others highlight pockets of decline and experimentation [9] [5] [6]. Longer‑term outcomes — including whether sellers’ total costs fall materially, whether buyer service levels erode, or whether off‑MLS workarounds become systematized — are not settled in current reporting (not found in current reporting).
7. Bottom line for 2025 transactions
The rules changed who publicly posts and how compensation is negotiated: buyer compensation is now something buyers and their brokers must explicitly agree to, and the MLS no longer functions as the default mechanism for offering buyer‑side splits; yet empirical evidence through mid‑2025 shows only modest average changes in buyer‑agent commission percentages while the market experiments with alternative fee models [1] [5] [6]. Consumers should read contracts, ask direct questions about fees, and shop agents; industry observers should watch for whether off‑MLS practices harden into new norms or enforcement/market pressures produce clearer, lower‑cost outcomes [7] [2].