NAR Settlement Update: What Does it Mean for the Boston Market in 2025?

Those who follow my blog know that I often talk about change as the one constant in real estate. Of course we all struggle with change; the real estate industry is no exception.

So it’s understandable that the NAR settlement has shaken up our community. It’s brought about significant changes in how real estate commissions are discussed, negotiated, and paid—this, after decades of talking about commissions in the same way, and using the same contracts and forms.

 

The NAR settlement shakeup, in my opinion, is a much-needed change.

Perhaps we have all been guilty of assuming that our buyers and sellers simply understood how commissions worked. Likely too, is that we all felt some discomfort discussing how exactly we were paid for the services we provide to our clients.

But now, the new practices require us to be much more transparent about commissions. We’re obligated to explain to our clients that commissions are not set by law, and as such, are negotiable. And that truly is a good thing. At Donnelly + Co, we believe that honest and clear expectations lead to better outcomes for everyone—buyers, sellers and agents alike.

So let’s look at a simple breakdown of these new changes. At the same time, I urge you to discuss this with your own agent, to understand more comprehensively what it all means for you.

 

NAR Settlement Information for Buyers

• The “Buyer’s Agreement”— Your agent is now required to sign this with you before their representation as your buyer’s agent begins. This agreement establishes the fee/commission they will be paid for their representation, as well as the scope of their representation. It is possible that the fee — or part of the fee — will be paid by the seller of the property you purchase (as has been common practice for a long time). However, you may be responsible for the fee yourself, or perhaps just a portion of it. There are many ways that you can pay this fee, and your agent will explain this to you.
• The Fee—The fee to your buyer’s agent may be part of your offer negotiation with the seller. If the seller is offering compensation to your agent for less than your agreed-upon fee, or if the seller is not disclosing how much compensation they are offering to your agent, you can include the commission you owe your buyer’s agent in the offer to the seller, and it can be negotiated along with the other terms of the offer.
• A New Way of Moving Forward—It may feel strange for you to sign this agreement if you have previously purchased a property with a buyer’s agent and not signed such an agreement. Be aware that your real estate attorney, your lender, and your title company may all require a copy of this agreement, and your agent is obligated to present this agreement with you before even showing you any properties. This agreement is designed to protect you, so that you fully understand how your agent is being compensated for their services to you.

 

NAR Settlement Information for Sellers

• Changes in Compensation to Buyers’ Agents —You are no longer obligated to pay any compensation to a buyer’s agent in your transaction. However, there are many benefits to offering a commission to a buyer’s agent and your agent can explain these to you.
• Changes in Displaying Your Offer to Buyers’ Agents—Any amount you decide to offer to a buyer’s agent can no longer be displayed in MLS. However, with your permission, it can be disclosed and marketed in other ways. You can also choose for it not be disclosed and you can instead request a buyer to include it in their offer for your property.
• Reminder About Commissions—Any buyer agent commission included in an offer is negotiable and not set by law.

Note: Different real estate companies may do things a bit differently.

What I’ve just discussed is what you can expect at Donnelly + Co. However, in the wake of the NAR settlement, there are differing views and approaches to the handling of commissions and their disclosure. My best advice, always? Talk to your agent about how their company is handling business to help you understand what to expect in your transaction.