Commission and Lawsuits: Changes in the Real Estate Industry

If you have bought or sold a home in the last couple of years, you have probably heard that real estate commissions changed. Some of what changed is real, and some of it needs a clearer explanation. Here is how I see it, as an agent who works with buyers and sellers every day.

All commissions are negotiable in real estate. In the residential real estate industry, business practices are standards put into place to help ensure efficiency in the service. These practices can range from operations, policies, or standard procedures. Negotiations and commissions are two of the most important business practices in real estate. In connection with residential deals, a traditional commission practice is for agents to charge sellers 5% to 6% for the listing services with plans of splitting the commission with the incoming buyer's agent. The National Association of Realtors (also referred to as the NAR) has regulation over the Multiple Listing Service (MLS), which is a tool for Realtors nationwide to list and promote the home they have for sale. One of the rules in the MLS required a commission amount for the buyer's agent to be put in order for that property to be listed. Because it was required for homes to be listed, the commission became more of a marketing aspect versus a negotiation. Critics argued it limited competition, affected negotiations, and violated antitrust laws.

This practice created an uproar and lawsuits were filed against the NAR and multiple big brokerages such as Keller Williams. In March 2024, the National Association of Realtors reached a $418 million settlement to end multiple antitrust lawsuits brought against them and other brokerages by home sellers (Banerjee & Paciorek, 2025). Beyond the payouts, the settlement required practice changes that affect agents and brokers nationwide. NAR agreed to implement these changes by mid to late 2024, and many went into effect on August 17, 2024 (Hill, 2025). Not only did the roles of the MLS change but there were also other regulations put in place for buyer's agents. Some of the laws that were put in place required written buyer-broker agreements, stopping buyer's agents from showing properties to buyers they are not in contract with (Hill, 2025). The NAR also agreed to remove cooperative compensation requirements in the MLS (Hill, 2025). Without advertising compensation amounts in the MLS, buyer's agents have to negotiate their offer and the commission amount they think is fair.

These rules can affect both sides of a transaction: the listing and buying side. On the listing side, this could affect the selling process. Without compensation being marketed, it is now a question whether the sellers are compensating the buyer's agent or not. Buyer agents can call and ask about the commission but now the seller has an option to not share compensation to prospective buyers. When I think about a listing my goal is to bring the best price possible to the sellers. How are we really representing our sellers if commission is being offered up before we even see what offers look like? There are many times in my career where a buyer's agent is expecting commission from my listing but has not brought a full price offer. Is it really the seller's job to pay the buyer's agent commission if they are not getting a full price offer? Another issue that could arise is your buyer might not have the money to cover the commission to pay you as an agent. When I first started in the business there were a lot of my clients who utilized the first-time home buyer program with no money down. If they're utilizing that program that might not necessarily ensure they have a 3% commission saved to pay a buyer's agent. It is important to have conversations with every client to explain how much the services cost. I have seen multiple agents over the years market their services as free because they ensure that the seller would pay their commission. That is the reason the NAR got sued because commission has not been explained to buyers and sellers correctly.

Recent surveys show that almost half of homebuyers and sellers did not know how much their agent received in commission and over a third did not know that they could negotiate fees at all (Banerjee & Paciorek, 2025). Regardless of the witch hunt, this is just one indicator that shows commissions are not being communicated or explained on a business level. I agree with some of the points of the lawsuit on how it is our job as real estate agents to explain how much our services cost, the outline of what the services offer and to secure a contract with the correct information in place signed by all parties. Buyer's Commission has been marketed in the MLS for so long that there are a lot of agents who feel like they deserve a portion of the listing commission and never negotiate their own commission with their own clients. How can we properly negotiate for our buyers if they're not aware of what our services cost? How can we even work with the client if there's not a contract in place and a commission has been established? I think that this lawsuit was a wake-up call for real estate agents across the nation and it also was a great business practice that needed to be implemented to help ensure the commission is being explained, clients understand the services being offered, and all duties performed by a real estate agent are being performed under a contract.