How will 2025 commission rule changes impact listing agent and buyer agent compensation structures?
Executive summary
The 2025 rule changes—driven by the NAR settlement and state laws—decouple buyer-agent compensation from mandatory MLS-displayed seller offers and require written buyer-broker agreements, shifting compensation negotiations toward buyers and their agents while leaving room for sellers to still pay off-MLS; early empirical evidence shows muted or mixed effects on commission levels, with some analyses predicting big declines and others observing little change or slight increases [1][2][3].
1. What changed: a structural shift, not an instant collapse
The central legal and procedural shifts are clear: listing agents may no longer post offers of compensation to buyer agents on MLS platforms as of the settlement implementation (effective Aug. 17, 2024), and brokerages must use written buyer representation agreements that state compensation terms before showings in many jurisdictions [1][2][3]. California’s law exemplifies the new model by mandating written agreements that must define compensation but does not force buyers to directly pay their agent—meaning seller payment remains possible but is no longer automatic or MLS-advertised [4].
2. How listing-agent compensation structures are likely to respond
Listing agents’ core fee model is largely unchanged in form—sellers still negotiate a listing commission with their agent—but the marketing and negotiation mechanics have shifted because offers to buyer agents cannot be broadcast on MLS, so listing agents must now convey any seller-side willingness to pay off-MLS through private channels or in seller-facing contracts [1][5]. That reduces the visibility and standardization of buyer-agent splits, which may push listing agents to be more explicit with sellers about how a listing’s attractiveness might depend on off-MLS compensation offers [6][7].
3. How buyer-agent compensation structures are evolving
Buyer agents now must secure written agreements outlining compensation—percentage, flat fee, or hourly—before showing homes, which formalizes price discovery between buyer and agent and transfers negotiation power away from an automatic seller-funded split to the buyer-agent dyad [3][8]. In practice, however, many buyer agents continue to be paid by sellers in competitive markets because sellers often offer compensation off-MLS to attract buyers, so the theoretical shift toward buyer-paid models has been partially blunted by market incentives [9][10].
4. What the data says so far: contested and mixed
Empirical results through mid‑2025 are conflicted: Redfin and other studies find little net change in buyer-agent commissions in the aggregate—commissions “have barely budged” or remain about the same—while Federal Reserve analysis and some academic work suggest the long-run equilibrium could cut commissions substantially under market-determined fees and decoupling [1][3][2]. Other industry reports even show modest upticks in average buyer-agent rates in 2025, underscoring that early outcomes vary by market conditions and timing [9][11].
5. Where the impacts will concentrate: transparency, negotiation, and market segmentation
The most immediate and certain impacts are procedural: greater transparency through required buyer agreements, earlier commission conversations, and fragmentation of how compensation is communicated [3][7]. Economically, effects will concentrate in thin or buyer-seller balanced markets where sellers are less willing or able to pay buyer agents; in hot, competitive markets sellers will often still offer compensation off‑MLS, preserving previous compensation levels [10][12].
6. Conflicting incentives and hidden agendas shaping outcomes
Stakeholders push differing narratives: NAR and some brokerages emphasize consumer choice and transparency gains, while seller-plaintiff advocates argue the rules remove an implicit surcharge; brokerages with high-fee models may lobby to preserve seller-paid norms, and local MLS operators face pressure to police off-MLS communications—practical enforcement and agent workarounds (email, texts, broker websites) complicate compliance and statistical measurement [1][8][5].
7. Bottom line — what agents and consumers should expect
The reforms reallocate where and how compensation is negotiated and require documentation, nudging buyer agents toward explicit fee agreements and forcing listing agents to be strategic in marketing without MLS-listed offers; yet market forces and workarounds mean compensation structures will adapt unevenly, with outcomes likely varying across regions and over a multiyear horizon rather than collapsing immediately [1][2][3].