Did the NAR settlement change how much agents get paid?

The settlement changed how agent compensation is structured and disclosed, not the total amount. Buyers must now sign buyer-broker agreements with explicit compensation terms before being shown homes. Sellers are no longer required to offer buyer's agent compensation through the MLS. In practice, many sellers still offer buyer's agent compensation to maximize their buyer pool, but it's now a negotiated and disclosed term rather than a built-in default.

Who pays the buyer's agent in 2026?

It depends on the transaction. Many sellers still offer to cover buyer's agent compensation as part of the deal terms — typically 2%–3% of the purchase price — because it attracts more buyers. When sellers don't offer to cover it, buyers either negotiate the compensation into their offer (asking for a seller concession) or pay their agent directly. Buyers must agree to their agent's compensation rate in writing before showings begin.

Are real estate agent commissions tax-deductible?

For sellers: real estate commissions reduce your net proceeds, which reduces any capital gains tax you owe on the sale — effectively a deduction against the gain. They're not directly deductible on your income taxes. For buyers: commissions paid to a buyer's agent are added to your cost basis, which reduces capital gains when you eventually sell — but they're not immediately deductible in the year of purchase.

How Do Real Estate Agents Get Paid in 2026?

May 22, 2026

The Old Model vs. the New Model

For decades, the standard U.S. real estate commission structure worked like this: sellers paid a total commission (typically 5%–6%) that was split between the listing agent and the buyer's agent through the MLS. Buyers never saw a separate fee for their agent — it appeared to come "for free."

The 2024 NAR antitrust settlement fundamentally changed the disclosure and negotiation requirements around this structure, effective August 2024. Here's what changed and what stayed the same.

What Changed After the NAR Settlement

Buyer-Broker Agreements Are Now Required

Before showing a buyer any home, agents must have a signed buyer-broker agreement specifying the agent's compensation — the amount, the payment source (seller, buyer, or shared), and the term of the agreement. This was previously standard practice in many states but is now a universal requirement in MLS markets.

Seller Compensation Offers Are No Longer in the MLS

Listing agents can no longer advertise buyer's agent compensation in MLS listings. This eliminates the old system where sellers effectively had to offer buyer's agent compensation to get listed. Sellers can still offer compensation, but it must be negotiated as part of the deal terms rather than posted in the MLS.

Transparent Disclosure Is Now Mandatory

Both buyers and sellers must receive clear disclosures about who is paying whom and how much. The "it comes out of the seller's proceeds" handwave is no longer acceptable — everyone must know and agree to the compensation structure before proceeding.

How Commissions Actually Work in 2026

Listing Agent Compensation

The listing agent — representing the seller — is paid a commission based on the sale price, specified in the listing agreement. Typical rates: 2.5%–3% of sale price. This is paid at closing from the seller's proceeds.

Buyer's Agent Compensation

Three scenarios now exist:

Seller offers to cover it: The seller agrees in the purchase contract to pay the buyer's agent a specified amount (e.g., 2.5% of purchase price). This is still the most common scenario because it maximizes the seller's buyer pool.
Buyer pays directly: The buyer pays their agent's fee at closing from their own funds. This is more common when sellers decline to offer compensation.
Negotiated concession: The buyer asks for a seller concession (a credit at closing) equal to their agent's fee, which effectively rolls the agent cost into the purchase price. Lenders have limits on concession amounts — check with your lender.

Total Commission Costs in 2026

Total commissions across both sides of a transaction now average 4.5%–5.5% in most markets, compared to 5%–6% historically. The decline reflects increased price sensitivity and negotiation following the settlement changes.

$400,000 sale: $18,000–$22,000 total
$650,000 sale: $29,250–$35,750 total
$1,000,000 sale: $45,000–$55,000 total

How to Minimize Commission Costs

Negotiate your listing agent's rate — especially on higher-priced homes
As a buyer, understand what your agent's fee is before signing
Compare multiple agents before committing to any rate
Consider flat-fee listing services if you're selling a high-demand, easy-to-sell home

Browse agents in your area on The Realtor Rankings to compare rates and services before starting negotiations.

Frequently Asked Questions

Did the NAR settlement change how much agents get paid?: The settlement changed how agent compensation is structured and disclosed, not the total amount. Buyers must now sign buyer-broker agreements with explicit compensation terms before being shown homes. Sellers are no longer required to offer buyer's agent compensation through the MLS. In practice, many sellers still offer buyer's agent compensation to maximize their buyer pool, but it's now a negotiated and disclosed term rather than a built-in default.
Who pays the buyer's agent in 2026?: It depends on the transaction. Many sellers still offer to cover buyer's agent compensation as part of the deal terms — typically 2%–3% of the purchase price — because it attracts more buyers. When sellers don't offer to cover it, buyers either negotiate the compensation into their offer (asking for a seller concession) or pay their agent directly. Buyers must agree to their agent's compensation rate in writing before showings begin.
Are real estate agent commissions tax-deductible?: For sellers: real estate commissions reduce your net proceeds, which reduces any capital gains tax you owe on the sale — effectively a deduction against the gain. They're not directly deductible on your income taxes. For buyers: commissions paid to a buyer's agent are added to your cost basis, which reduces capital gains when you eventually sell — but they're not immediately deductible in the year of purchase.