What does the NAR Settlement Means for me as a Home Buyer?

Navigating the New Era of Real Estate Representation: What Every Home Buyer Needs to Know

Recent changes stemming from the National Association of REALTORS® (NAR) settlement have brought about significant updates to how broker commissions are handled—offering greater flexibility and transparency to both buyers and sellers.

In response to the NAR settlement, the California Legislature enacted Assembly Bill 2992, which took effect on January 1, 2025. This legislation, combined with industry practice changes effective August 17, 2024, has reshaped how buyer representation and compensation are structured.

What This Means for You as a Home Buyer

Today’s home buyers have more choices than ever when selecting the right real estate professional. Not every buyer requires the same level of service, and not every agent delivers the same expertise. By aligning yourself with a Top Individual Agent—someone with deep local knowledge and proven experience—you gain a trusted advisor dedicated to helping you make the best decisions in a complex market.

The new rules put you, the buyer, in the driver’s seat:

Buyer Representation Agreement Required: Before viewing homes, buyers must now sign a Buyer Representation Agreement with their chosen agent. This ensures clarity, commitment, and mutual understanding from the very beginning.
Commission Negotiated Directly with Your Agent: The buyer and their agent will now negotiate the agent’s compensation, which is clearly outlined in the Buyer Representation Agreement. This empowers you to tailor the services you receive to your individual needs and budget.
Seller Compensation is Optional, Not Guaranteed: Sellers may still offer compensation to Buyer Agents, but such offers are no longer published as a fixed commission in the Multiple Listing Service (MLS). If a seller does not offer compensation, the buyer will pay their agent’s fee at closing, as agreed in the Buyer Representation Agreement.
Strategic Implications for Buyers: If a seller chooses not to cover the Buyer Agent’s commission, it may reduce the buyer’s available funds for down payment and closing costs—potentially lowering the purchase price a buyer can offer. Conversely, sellers who agree to pay this commission enhance their home’s affordability and marketability.
Industry Best Practice: Top agents now include a request for seller-paid buyer agent compensation directly in the Residential Purchase Agreement, aligning with evolving standards while prioritizing your purchasing power.

Added Value: Off-Market Properties

Your Buyer Representation Agreement can include language that incentivizes your agent to search beyond the MLS for off-market properties—a savvy strategy that often leads to unique opportunities and better value. A highly skilled agent with strong local connections may uncover properties before they hit the open market, helping you find a dream home in the perfect location—often at a more favorable price.

What Hasn’t Changed

While the mechanics of commission have evolved, the fundamentals of real estate remain unchanged:

Buyers still want to buy. Sellers still want to sell.
REALTORS® remain committed to guiding you through the process, always acting in your best interest and upholding the industry’s highest ethical standards.
Commission payments can still be structured in a way that preserves your purchasing power.
In most transactions, the seller continues to pay the buyer agent’s commission through escrow, as has long been the industry norm.
Agents will continue to work diligently to find you the right property—and even harder when empowered to locate off-market opportunities.
Dual agency, with your consent, remains an option—especially when your agent locates an off-market property and represents both parties fairly and transparently.

Choosing the Right Agent Matters

Not all agents are created equal. When selecting your Buyer Agent, ask the right questions:

What is their experience and market knowledge?
Can they access off-market inventory?
What technology and networks do they leverage?
How do they handle negotiations and ensure your best interest?

Most importantly, don’t be misled by teams that promote high transaction volume. Often, the “team leader” you meet at the listing appointment passes your file to a junior associate with far less expertise. In contrast, a Top Individual Agent stays intimately involved in your transaction, supported by a professional team for logistics, but personally overseeing critical tasks like pricing, negotiation, and strategy.

Final Thoughts

Finding the right home shouldn’t feel overwhelming. With expert guidance, transparent communication, and a clear understanding of your representation, you can move forward confidently and make smart, empowered decisions.

📘 For a detailed look at the home buying process, download my exclusive Home Buyer Guide.

If you have questions about these changes or are ready to begin your home search, I’m here to help—every step of the way.