Q: My wife and I are considering downsizing to a much smaller home. So we would be home sellers and home buyers simultaneously. We are hearing conflicting opinions from our friends and real estate agents about the effects of the NAR settlement. Can you give us an update on what we need to know before we jump in?
A: The conflicting opinions make sense once you know why: the rules changed twice in two years, first in 2024, then again when a two-year appeal was finally resolved this August, and you’re about to feel both sides of them in the same transaction, something few homeowners face at once.
Start with what actually changed. Since August 2024, a seller no longer advertises a fixed buyer-agent commission on the MLS. And a buyer must sign a written buyer-agency agreement, spelling out exactly what they owe their agent, before that agent shows them a home. Those two rules used to work invisibly, in the background of every transaction. Now they’re explicit negotiations, and you’re going to have both conversations, once as the seller of your current home, once as the buyer of your next one.
Here’s the part your friends may be getting wrong: prices didn’t fall the way the settlement promised. Redfin, a public brokerage, reports that the buyer’s-agent commission bottomed at 2.36 percent the exact quarter the new rules took effect in 2024, then climbed back to about 2.42 percent by late 2025, landing right back near where it stood before the settlement. A Federal Reserve study published last year adds the reason why: researchers looked at 15 states that required buyer-agency agreements years before this settlement, and found those agreements alone had no measurable effect on commission rates. So don’t go in expecting a discount. Go in expecting a negotiation that didn’t used to exist.
As the seller, you now decide whether and how much to offer a buyer’s agent. Offer too little and you may see fewer showings from agents steering clients elsewhere. This is a real strategic decision now, worth discussing directly with your listing agent.
As the buyer of your smaller home, you’ll sign a buyer-agency agreement specifying your agent’s fee. If the seller of that home doesn’t offer enough to cover it, you owe the gap directly, out of pocket, at closing. That money can’t be rolled into your mortgage. For a downsizing couple counting on sale proceeds for the next purchase, an unexpected gap on the buy side can throw off your numbers, so ask before you sign anything.
Here’s why your agents may sound uncertain: this took longer to settle than expected. The Eighth Circuit affirmed the settlement on August 19, rejecting every objection. A separate case brought by homebuyers, not sellers, is still active, NAR agreed just this April to pay $52.25 million toward resolving part of it. The Department of Justice raised concerns during the appeal about the buyer-agreement rule, but the ruling leaves it in place. Agents you talk to may still be catching up on the news.
My advice: negotiate both sides of your transaction as separate conversations, ask every agent directly what happens if a shortfall shows up at closing, and don’t assume every agent has caught up yet.
