In August 2024, the National Association of Realtors settlement fundamentally changed how real estate commissions work in America. Sellers are no longer required to offer compensation to buyer's agents through the MLS, and buyers must sign representation agreements before touring homes. One year later, the dust is settling — and the picture is nuanced.

What Actually Changed

The Old System

Sellers listed properties on the MLS with a total commission (typically 5-6%), split between listing and buyer agents. Buyers rarely thought about commission because the seller paid it. This system had been standard for decades.

The New Reality

  • No MLS commission offers: Sellers can no longer advertise buyer agent compensation on the MLS
  • Buyer agreements required: Agents must have signed agreements with buyers before showing properties
  • Negotiable everything: Commission rates, who pays what, and service levels are all open for negotiation
  • Seller concessions: Many sellers still offer buyer agent compensation — it's just negotiated outside the MLS

What's Happened in Practice

Commission Compression

Average buyer agent commissions have dropped from 2.5-3% to 2-2.5% in most markets. Some discount brokerages are offering flat fees ($3,000-5,000) or rates as low as 1%. This saves investors real money on acquisitions:

  • $300,000 property at 3%: $9,000 in buyer agent commission
  • $300,000 property at 2%: $6,000 — a $3,000 savings
  • $300,000 property at flat $4,000 fee: $5,000 savings

Negotiation Leverage

Investors who don't use buyer agents (or use discount agents) now have clear negotiation leverage. When a seller doesn't need to factor in buyer agent compensation, there's room to negotiate a lower purchase price or request seller concessions.

Investor-Friendly Adaptations

The new system actually benefits repeat investors:

  • Volume discounts: Agents are willing to reduce per-deal fees for investors who bring multiple transactions
  • Flat-fee arrangements: More agents offer flat fees for experienced buyers who need less hand-holding
  • Task-based pricing: Pay only for the services you need (showing access, contract writing, negotiation)
  • Direct deals: Some investors now go directly to listing agents and negotiate dual agency or unrepresented buyer terms

How Smart Investors Are Adapting

1. Negotiate Agent Fees as Part of Deal Structure

Include buyer agent compensation in your offer structure. Ask the seller to cover it as a concession, or negotiate a reduced purchase price that accounts for you bringing your own agent at a lower rate.

2. Use Technology as Your Agent

AI tools like Investra can perform much of the analysis work that buyer agents used to provide — property evaluation, comps analysis, market research, and deal screening. This lets you work with a more transactional agent at a lower fee.

3. Build Direct Relationships with Listing Agents

Many investors are building relationships with listing agents in their target markets. When you can bring a pre-approved, no-contingency offer directly, listing agents are motivated to work with you — often at reduced commission.

4. Consider Getting Licensed

For active investors doing 4+ deals per year, getting a real estate license can save thousands in commissions. You can also earn commissions on your own purchases, effectively reducing acquisition costs by 2-3%.

Impact on Selling Investment Properties

When it's time to exit, the new commission landscape affects your disposition strategy:

  • Lower listing costs: You can negotiate listing agent fees down to 1-2% in many markets
  • Buyer agent question: You'll need to decide whether offering buyer agent compensation attracts more buyers and a higher price
  • FSBO viability: For-sale-by-owner has become more viable with flat-fee MLS listing services

The Bigger Picture

The NAR settlement is part of a broader trend toward transparency and efficiency in real estate. Technology platforms, AI-powered analysis, and direct-to-consumer models are reducing friction and costs. Investors who embrace these tools and adapt their strategies will capture more value on every deal.

Use Investra to analyze properties independently, get AI-powered investment scores, and make data-driven decisions — with or without a traditional buyer's agent.