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Navigating the 2024 NAR Settlement: What Buyers and Sellers Need to Know

Insights from San Antonio's Realtor Couple on the Implications of the NAR Agreement in the San Antonio Market and what buyers and sellers need to know about the possible changes coming

NAR UPDATE - Lawsuit Settlement - Game Changer

"Change is the law of life. And those who look only to the past or present are certain to miss the future." - John F. Kennedy

The recent announcement by The National Association of REALTORS® (NAR) regarding an agreement to resolve nationwide claims has sparked discussions and raised questions within the real estate community. As trusted real estate professionals in San Antonio, we feel obligated to update and enlighten our clients and customers about these disruptive updates.

Through this article, we will do our best to provide an overview of the agreement, its potential implications, and proactive strategies for buyers and sellers to navigate the market during the coming changes.

Let's start with what's going on. NAR disclosed an agreement poised to resolve the nationwide claims concerning broker commissions and how transactions are currently advertised on the Multiple Listing Service (MLS), raising questions and concerns among real estate agents, home buyers, and sellers alike. Under this settlement, NAR, along with over one million members and various industry stakeholders, promises to pay $418 million over four years, pending court approval, and the changes are set to take effect in mid-July of 2024. This means from now till July, no changes are expected to take place.

The proposed agreement addresses claims against NAR and other entities related to the Multiple Listing Service (MLS) cooperative compensation model, specifically the MLS Model Rule introduced in the 1990s.

The issue of broker commissions and buyer representation lies at the heart of the settlement. Plaintiffs argue that sellers are obligated to pay buyer's agent commission as part of their expense for listing the home and that advertising it on the MLS enables buyer's agents to pick and choose which listing to show to their buyers based on the commission offered.

To better understand the situation let's start by discussing how the current process works and what the current best practices are:

On the selling side:

  • When the sellers hire agents, they give their recommendations based on market knowledge and how best to market a property to get the greatest value and sell in the least amount of time.

  • During the listing process, the seller decides on the best way forward based on the listing agent's recommendations, this includes the sale price, concessions offered if any, buyer's agent compensation if any, as well as, what's included, or excluded in the sales price.

  • The seller is in the driver's seat and has full control over whether to accept the recommendations offered, hire another agent, or go for different solutions, such as price, concessions, etc.

  • Once the seller decides on all the above, the listing agent inputs all these details into the MLS. In turn, this makes it available to all other agents, as well as, all the real estate websites such as,, etc.

On the buying side:

  • When a buyer hires an agent, they sign a "Buyer's Representation Agreement (Buyers Rep)". The agreement states how much the buyer is willing to compensate the agent and what the agent's fees are. In the current market, it is more common for the sellers to offer the buyer's agent compensation, so this usually covers the amount in the "Buyer's Rep" and buyers don't have to worry about the cost of having an agent, however, if a buyer decides to put an offer on a property where the seller is offering no buyer's agent compensation or a lower amount than what is stated in the "Buyer's Rep", it falls upon the buyer to pay all or make up the difference out of pocket. It's the responsibility of the buyer's agent to explain this to their client and to ensure that they understand and agree to these terms.

It's critical to understand that all of the above is negotiable, compensation is what the sellers and buyers approve and agree upon with their agents. The agent's job is to provide consultation and the proper data that supports it for the client to make the best decisions, and proceed accordingly. It's always the client who makes the decisions, not the agent, otherwise, this could be considered steering. It's also crucial to understand; like any profession, agents, more especially so, Realtors have a code of ethics that they abide by and if broken, they open themselves to litigation.

It's the agents's duty to always look after the welfare of their client and for their client's best interests, even if it conflicts with the agent's interest, this is what fiduciary responsibility means and all Realtors are expected to uphold this fiduciary responsibility.

For example, if an agent or a Realtor for whatever reason including but not limited to the compensation offered is caught steering, price fixing, or withholding information from their clients which could negatively affect their client's ability to sell, purchase, find a home or their ability to make sound decisions, this would be considered a direct violation of trust and fiduciary responsibility towards their client and the agent could very well lose their license and be viable for a large fine.

While we're discussing fiduciary responsibility, it's worth noting that all agents automatically have their fiduciary responsibility to the seller, unless they have a Buyer Representation Agreement with a buyer, this is the only time when an agent can shift their responsibility away from the seller.

Now that we've gone over the process and best practices, you may wonder what is the fuss all about? or you may think that the system as is makes sense, and the answer is: The issue is really about how commissions are usually negotiated right now. This brings us to the "decoupling of commissions".

So let's discuss the elephant in the room, "the unspoken norm" but first, it's important to note that this "norm" is not an obligation nor is it a must. In practice, there are many cases where this "norm" does NOT apply.

The "norm" in most markets is that the seller offers some or all compensation to the buyer's agent; this is an unspoken norm and has emerged naturally as an industry best standard due to the following advantages:

  1. It helps ensure that the buyers putting in an offer are properly vetted and represented and thus do not waste the seller's time needlessly and decrease the potential risks, scams, fraud, etc.

  2. It helps more buyers, such as new home buyers and cash-strapped buyers to qualify for the purchase and thus increase the pool of interested buyers and in turn the amount of offers received which can increase the value of a property via competition through multiple offers situations.

  3. It helps eliminate conflicts and disputes between cooperating brokers by ensuring clarity regarding compensation.

Remember, buyer agents are required to sign a buyer's representation agreement with their buyers and the contract states how much their compensation is, for helping the buyer with the purchase. This has always been the case and the amount has always been negotiable.

As with any industry, it's common to have some averages and norms, Real estate is no different, in most markets agents are compensated anywhere from 1 to 7% of the sale price and they only get paid upon closing of the transaction. It's worth noting that agents put in the work first, take on all the risk, spend all the time, fund all the marketing, do all the negotiation back and forth, and do not get compensated unless the deal is completed.

Many factors should also be considered when discussing agents' commissions and fees, some discount brokers discount their fees, some have flat fees, and more skilled agents usually request higher fees. In conclusion, a commission or any compensation paid to an agent is based on the value and amount of hard work the agent puts into a deal or is perceived by their client and agreed upon by both parties.

Recognizing that compensation has never been a fixed amount set nationally is important. Each market has its standards and norms and each buyer, seller, and agent has the flexibility to negotiate commissions based on many factors, including market conditions, property type, and individual circumstances.

For example, in a seller's market, where demand exceeds supply, sellers have more leverage and it's common for them to offer reduced or no commission to a buyer's agent. While in a buyers' market where supply exceeds demand, buyers have the leverage and it's more common for sellers to offer concessions or commissions to the buyer's agent. Aside from market conditions, individual circumstances also play a role, such as probate, foreclosures, divorce, and special situations, etc.

The value of a skilled and experienced agent cannot be overstated regardless of the market condition. A professional and skilled agent brings a wealth of expertise, negotiation skills, and market insights to the table, which helps create a smoother and more successful transaction for their clients while decreasing potential risks.


This is the main topic of the case, and as the saying goes, the beef and potatoes of the issue. The current "norm" is that when the listing agent is negotiating their commission, they also negotiate the buyer's agent commission in most cases at the same time, for example, they could negotiate 3% for their side of the deal and 3% for the buyer's agent, making it a total of 6% for the seller to have to pay to the listing broker which eventually gets distributed as previously agreed and upon closing from the proceeds of the sale.

One of the aims is to decouple the commissions, having the sellers negotiate only their part of the deal and letting the buyers negotiate their side with their agent (if they choose to have one). The belief is that by decoupling the commission, sellers will no longer be "responsible" for the buyer's agent commission and thus lower their costs and increase their revenue from the sale. The thing is, as mentioned above, the sellers were NEVER "responsible for the buyer's agent, it's only the industry's current norm.

If changing the industry norm is the goal, removing the commission from the MLS will not automatically ensure this happens. The settlement in its current case, does not prohibit sellers, nor listing agents from negotiating or offering a buyer's agent compensation, all it does is prohibit it from being advertised on the MLS, and if the sellers continue to choose to offer compensation to the buyer's agent, then this norm will stay in effect.

What can't be disputed, however, is that this case has started the discussion and raised awareness on the topic, and that just like always, it's the buyers and sellers who dictate how the market behaves. Where we go from here remains to be unseen, but there are some safe assumptions and expectations that we can rely on.

Possible Implications for Buyers and Sellers:

  • Starting mid-July sellers and listing agents can no longer offer or mention buyer's agent compensation through the MLS, however, they will still be able to offer buyer concessions on the MLS.

  • Sellers and listing agents can offer buyer agent compensation, however, they can't communicate or advertise it anywhere on the MLS.

  • Sellers will remain in the driver's seat when offering concessions to buyers or compensation to agents.

  • More buyers may be required to compensate their agents directly without depending on the seller's compensation or concessions. We foresee more conversations taking place between buyers and their agents regarding compensation.

  • There is a possibility if the market shifts toward sellers not offering any compensation or lower compensation to the buyer's agent, that these changes lead to buyers having extra costs for buying homes, which in turn may increase the entry cost to homeownership and decrease demand thus lowering home prices, but this is only speculative.

  • There will most likely be some chaos in the market and uncertainty while new rules and processes are implemented and new norms are adopted.

  • More buyers will be asked to sign a Buyer's Rep with their agents before seeing any homes. (This is currently the protocol, a best practice, and is not new, however, currently, it's usually very lax and many agents do not pressure their buyers to sign anything right away, with the upcoming changes, we forecast that it will not be so lax and will start being implemented more rigorously by all agents).

  • We can't be certain of the effects the changes will have on the market, this will be determined as always by the buyers and sellers.

  • It's almost guaranteed that good agents will continue to request suitable compensation for their work and continue to demonstrate their value to their clients, while other agents will resort to discounting their services as they have less to offer to their clients, which is already the case, but it's worth noting that the average agent's annual income is around $34,000, based on this, you can imagine that the average agent doesn't successfully close many deals.

This brings us to why you should be selective when hiring an agent to represent you and the benefits good agents will continue to bring to you.

Benefits of Working with a GOOD Agent:

For buyers, the advantages of working with an agent are numerous. From access to exclusive listings and market data to expert negotiation and transaction management, an agent acts as a trusted advisor throughout the home-buying process and helps you navigate and make good decisions.

On the seller's side, agents provide essential services such as pricing guidance, marketing strategies and updates, and assistance with negotiations, ultimately maximizing the value of the property. These are but a few of the essential services an agent provides.

Navigating the Changes:

While the full impact of the settlement remains to be seen, it's essential for both buyers and sellers to stay informed and proactive. With the potential changes expected to take effect by mid-July, those planning to buy or sell a home in the near future should proceed as usual and seek the guidance of a good real estate agent. However, it's advisable to monitor developments closely and adjust strategies accordingly.

Now more than ever, buyers and sellers should be selective with who they hire to represent them and it should be based on the value, experience, and skills the agent brings to the table.

As your dedicated Realtors, we remain committed to providing exceptional service and support throughout these changes. While uncertainties may arise, we believe in the resilience of the real estate industry and our ability to adapt to new challenges. Our priority is to continue serving our clients with integrity, professionalism, and unwavering dedication.

In conclusion, while the 2024 NAR settlement may introduce new dynamics to the real estate landscape, nothing major should change, especially how agents are selected, how we perform for our clients, and least of all, our code of ethics.

Our focus remains on delivering unparalleled service and support to all our clients, continuing to learn, sharpen our skills, and get better for our clients, and to continue upholding our ethical responsibility toward our client's best interests.

With our expertise and dedication, we're here to guide you through every step of your Real estate journey, and rest assured, we'll always have your best interests at heart and work tirelessly to ensure a smooth and successful Real estate experience whether on the buying or selling side.

If you have any questions or concerns about how these developments may impact you, please don't hesitate to reach out. We're here to answer your inquiries and help you every step of the way.

San Antonio Realtor Couple

Gabriel & Kristina Zachary

San Antonio REALTOR Couple


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