Decouple Buyer and Seller Agent’s Compensation

Previously, real estate commissions for both the listing agent and the buyer’s agent were bundled into a single fee in the listing agreement. When a property was posted on the MLS, a portion of that fee was allocated to the buyer’s agent, commonly splitting the total commission 50-50. However, this practice has now ended, and MLS listings may no longer reference the buyer’s agent commission.

This change stems from class-action lawsuits—primarily Sitzer/Burnett v. National Association of Realtors and Moehrl v. National Association of Realtors—which accused the plaintiffs (NAR and several major brokerages) that requiring, offering and posting commissions on the MLS allowed brokers to fix the fee by consciously coordinating their conduct. The Sitzer/Burnett case led to a 2024 settlement that imposed significant changes on how commissions are disclosed and handled, including removing buyer agent commissions from MLS listings. As a result, buyers must now negotiate compensation directly with their agents instead of relying on a pre-established split in the listing.

The opportunity with the decoupling of fees is the creation of a new market, which is the market for buyer agent services. Now is the time for brokers and their agents to establish a value proposition of buyer agent services in their company. For many buyer’s agents, the industry practice of simply accepting whatever was offered in the MLS led to a decrease in income for the same work. For skilled buyer agents who offer great value to their clients, including the negotiation skills that save their clients’ money, it is quite possible that this change leads to them effectively giving themselves a raise. For the consumer, the market-based approach to the buyer fees can lead to a variety of options that give them both choice and the opportunity for savings.

Savvy brokerages may also see this as an opportunity to create premium services to further differentiate themselves from other companies. The North American consumer has shown that they are willing to pay for services that generally make their lives easier and more hassle-free, and this new free market for services on the buyer side presents a creative space for brokers and agents to compete.

While these changes aim to empower buyers in negotiating with their agents and enhance transparency in fees and costs, some argue this shift may be a step backward. The American real estate system, with its cooperative structure and bundled compensation model, was seen as more efficient than other markets worldwide where buyer and seller compensation are separate.

That said, the U.S. real estate industry will adapt, and though the long-term effects of these changes remain uncertain, forward-thinking professionals will see this as a significant opportunity to innovate. Agents must embrace the decoupling of the previous fee structure and position themselves for future success.