Buyer's Agent Compensation After the 2024 NAR Settlement: What Changed

The Core Answer: How Buyer's Agents Are Paid Now

Starting August 17, 2024, the National Association of Realtors (NAR) settlement fundamentally changed how buyer's agents are compensated. The biggest shift: buyer's agent compensation is no longer listed on the MLS listing sheet as an offer the seller makes to buyer's agents. Instead, you — the buyer — must negotiate and agree separately with your agent about how they will be paid, and what you will pay for their representation.

In practice, this means three things happen in parallel: (1) the seller's listing agent and the seller agree on a commission split for their side, (2) you and your buyer's agent sign an agreement that states how your agent gets paid (flat fee, percentage, hourly, retainer, or something else), and (3) you understand upfront what your cost of representation is. The old model, where seller funds often covered buyer's agent commissions invisibly, is gone.

What the August 2024 NAR Settlement Actually Changed

The settlement between the NAR and a group of home sellers (Sitzer-Burnett) addressed the way buyer's agent compensation appeared in MLS listings. Here's what happened:

• •Effective August 17, 2024, member MLSs can no longer display buyer's agent commission offers on the MLS listing data that is publicly distributed and syndicaled.
• •Seller's can still offer to pay buyer's agent commissions — they just can't advertise that offer on the MLS in a way that automatically incentivizes all buyer's agents.
• •The removal of this offer creates a direct negotiation requirement: you must work out compensation terms with your agent before or at the time you sign a buyer-agent agreement.
• •Nothing changed about appraisal, financing, closing timelines, or the mechanics of a home sale. The lender doesn't care who pays the buyer's agent, and your offer to the seller is made on the purchase agreement — not tied to agent compensation.

The intent of the settlement was to increase transparency and choice. Previously, a buyer could assume their agent was "free" because the seller paid the commission — but that cost was baked into the home's price. Now, you see the cost explicitly and can negotiate it.

Buyer Agent Commission Now: Separate Negotiation, Not Automatic Seller Payment

In the old world, you'd call a buyer's agent, tour homes, and at closing, the seller's proceeds would typically be split among the seller's agent and the buyer's agent — a transaction that happened in the background. In most Middle Tennessee markets, this was often a 3% / 2.5% or similar split of the sale price.

Post-NAR, that's not automatic. Here are your real-world options:

• •Negotiate directly with the agent before signing them: You can ask if they'll work for a flat fee, a percentage of the final sale price, or ask if the seller can still pay a buyer's agent commission (many sellers still choose to offer this in their listing marketing, just not on the official MLS).
• •Sign a formal buyer-agent agreement: This is now required in most cases and spells out exactly what you're paying and under what circumstances (flat fee, percentage, hourly, or conditional on the home being bought).
• •Ask the seller to pay: Some sellers still offer buyer's agent commissions in their listing marketing or during negotiation. If the seller offers it, the compensation can work the same as before — but it's explicit and negotiated, not assumed.
• •Use a discount broker: Some brokers work on flat fees ($500–$2,000 for representation on a purchase) or reduced percentages.
• •Self-represent (FSBO purchases): You can choose not to use a buyer's agent at all, though this shifts the burden of market research, negotiation, and inspection coordination entirely to you. Some sellers and their agents resist working with unrepresented buyers, so this path is less common.

For buyers represented by The Will Johnson Team, we typically work in an environment where the seller's listing agent or marketing materials still offer buyer's agent commission — which often results in little or no out-of-pocket cost to you for our representation. However, this is not guaranteed post-settlement. Our team can work with you on a flat fee, a retainer, or percentage basis if needed. We also charge a broker administrative fee of $499 in some cases, though this can often be absorbed at closing by the seller or lender in a competitive market.

Buyer-Agent Agreements: What They Are and When You Need One

A buyer-agent agreement (also called a buyer-brokerage agreement or representation agreement) is a contract between you and your agent's broker. It outlines:

• •Who represents you (your agent and their brokerage).
• •How they are paid and when (at closing, upon opening escrow, upfront as a retainer, hourly, etc.).
• •The duration of the agreement (often 60, 90, or 120 days, with extensions).
• •The duties your agent owes you (fiduciary duty, confidentiality, honest representation, diligent effort to find homes).
• •What happens if you don't buy (do you owe a fee? is it refundable?).
• •Whether the agreement is exclusive (only this agent can show you homes) or non-exclusive.

Post-NAR, these agreements are now standard and necessary. Before August 2024, many buyer-agent relationships were informal — you'd just work with an agent without a written agreement. Now, most brokers require a signed agreement to establish the representation and compensation terms.

Key insight: The buyer-agent agreement is NOT the same as the purchase agreement you'll sign with the seller. One is between you and your agent; the other is between you and the seller.

How Much Does Buyer's Agent Representation Cost?

Cost varies widely depending on your market, the agent's experience, and what you negotiate. Here's the typical range:

• •Flat fee: $5,000–$20,000, depending on the home's purchase price and market complexity. A flat fee might look like $10K for a $400K home purchase.
• •Percentage of sale price: 0.5%–2.5% of the final sale price, typically on the buyer side. (This is lower than the traditional 2.5%–3% because it's negotiated separately and the seller isn't implicitly funding it.) On a $400K home, 1% would be $4,000.
• •Hourly rate: $150–$400 per hour, depending on the agent's experience and your market.
• •Retainer model: A flat upfront fee (typically $1,500–$5,000) that gets credited back against your costs at closing if you buy, or forfeited if you don't.
• •Conditional commission: Some agents still work on the promise of a seller-paid commission. If the seller offers buyer's agent compensation, you pay nothing out of pocket. If they don't, a fallback fee applies (e.g., you pay 1% of the sale price).

For The Will Johnson Team in Middle Tennessee, representation often results in little or no direct cost because sellers and their agents in our markets still typically offer buyer's agent compensation — though this is not guaranteed post-settlement. Our broker fee of $499 can apply, though it's often absorbed at closing by the seller or lender in competitive deals. The specifics depend on the listing, the seller's motivation, and the agreement you reach with your agent upfront.

VAR (Buyer's Agent Retainer) Model: Flat Fee vs. Commission vs. Hourly

One increasingly common approach is the "buyer's agent retainer" (BAR or VAR model), where you pay a retainer upfront, which is then credited back at closing.

How it works: You might pay $2,000 upfront to secure your agent's representation. If you buy a home through your agent, that $2,000 (or a portion of it) is credited back from your closing costs or the seller's proceeds. If you don't buy within the agreement period, you may lose that retainer — it compensates your agent for their time and effort even if no sale closes.

Why it's gaining traction: For buyers, the retainer model can create clarity (you know the max out-of-pocket cost upfront). For agents, it ensures they're paid for effort even in markets with slow sales velocity or where buyer-agent offers have evaporated.

Weigh the terms with your agent and review the agreement carefully. Some retainers are fully refundable if you don't find a home; others are not. Some are credited back 100% at closing; others are credited back at a reduced rate. The details matter.

What Happened to Seller Compensation Offers on the MLS?

This is where the settlement's practical impact shows most clearly.

Before August 2024: The MLS listing included a field for "buyer's agent compensation" (e.g., "Buyer's Agent Commission: 2.5%"). Every agent in the market could see this offer, and it was a blanket incentive to bring a buyer to the property.

After August 2024: This field is no longer visible on the publicly distributed MLS data. Sellers can still choose to offer buyer's agent compensation — but they advertise it in their listing marketing materials, through their agent directly, or in a private MLS note that only brokers can access (rules vary by MLS, and Tennessee rules vary by local board).

What this means in practice: You can no longer scan the MLS and see every listing's buyer's agent offer. You or your agent need to call the listing agent or review the listing marketing to ask, "Does the seller offer buyer's agent compensation?" If yes, what percentage? If no, you'll need to negotiate separately with your agent.

In higher-priced markets and competitive areas, sellers often still offer buyer's agent compensation to attract good agents and buyers. In slower markets or when a seller is motivated to cap costs, the offer may not be there — which is where you and your agent discuss alternatives.

Tennessee-Specific: How Local Brokers Adapted Post-Settlement

Tennessee doesn't have state-specific regulations that override the NAR settlement. Instead, local MLSs (Middle Tennessee Regional MLS, Tennessee Statewide MLS, etc.) have adapted their rules to comply with NAR's directive, and individual brokers have developed their own policies.

In the Nashville area and Middle Tennessee broadly, the market has adjusted as follows:

• •Buyer-agent agreements are now standard in every brokerage (including eXp Realty, where The Will Johnson Team is based). You'll sign one before touring homes.
• •Many listing agents and sellers in our market still offer buyer's agent compensation to remain competitive and attract buyer's agents. This is especially true for residential sales in Williamson, Davidson, Maury, Rutherford, and surrounding counties.
• •Some discount brokers and flat-fee services have launched or expanded in Tennessee, offering $500–$2,000 buyer representation packages. These are now a viable alternative post-settlement.
• •Hourly billing and retainer models are gaining traction in Tennessee but remain less common than flat-fee or percentage-based compensation.
• •No Tennessee broker can compel you to waive buyer representation or to negotiate compensation terms unfairly. The Tennessee Real Estate Commission (TREC) enforces brokerage conduct and fiduciary duties.

The Will Johnson Team operates under eXp Realty's brokerage policies, which include full fiduciary representation and flexible compensation models. We're equipped to work with the post-settlement landscape — whether the seller offers buyer's agent compensation or you prefer a flat fee or retainer arrangement.

What Didn't Change (For the Buyer's Side)

It's important to note what stayed exactly the same:

• •Your purchase agreement and offer terms: You negotiate the price, contingencies, closing date, and appraisal terms with the seller — none of this changed.
• •Appraisal and inspection: The lender still requires an appraisal; you can still negotiate inspection timelines and repair requests. No shift in those processes.
• •Closing costs and financing: Your lender doesn't care who pays your agent. Closing timelines, earnest money, and loan approval processes are unchanged.
• •Your agent's duties to you: A good buyer's agent still provides market research, shows homes, negotiates on your behalf, manages contingencies, and represents your interests — that fiduciary relationship is still the foundation.

Practical Steps to Prepare (As a Buyer)

If you're thinking about buying a home in Middle Tennessee, here's what to do before you reach out to an agent or before you make an offer:

1. Get pre-approved for a mortgage. This hasn't changed, and sellers expect it. Talk to your lender about their home-buying timeline, appraisal requirements, and closing-cost estimates so you understand the full picture.
2. Decide your agent representation preference. Do you want a flat fee, a retainer with credit-back, a percentage-based fee, or do you want to explore options where the seller might cover buyer's agent compensation? Have that conversation ready for your initial call.
3. Understand that a buyer-agent agreement is not a binding purchase contract. It's a representation and compensation agreement with your agent's brokerage. Review it carefully, ask questions, and don't sign if the terms don't work (especially the duration, fee structure, and what happens if you don't buy).
4. Ask your agent upfront: "In this market and for homes in my price range, what percentage of listings offer buyer's agent compensation?" This gives you a sense of what to expect and plan for.
5. Know your budget for representation. If you're paying 1% of a $400K purchase price, that's $4,000. Factor that into your affordability conversation with your lender if it's out of pocket (though often it's covered by the seller's proceeds in this market).

The Honest Read: What the Settlement Means for You

The NAR settlement forced transparency into a process that was often invisible. That's good: you now see what buyer representation actually costs, and you can negotiate or shop for services openly.

But don't panic. In active markets like Middle Tennessee (Nashville, Franklin, Williamson County, etc.), many sellers typically still offer buyer's agent compensation because it's competitive to do so, though this varies by listing and market conditions. Agents who represent buyers are still highly motivated to bring serious, pre-approved buyers to listings. That hasn't changed.

The real shift: representation now requires intentionality. You can no longer assume your agent is "free." A buyer-agent agreement should be reviewed carefully to understand the compensation model (flat fee, retainer, percentage, or contingent on seller offer), and questions about how it applies to your situation should be discussed with your agent or attorney.

And remember: a good buyer's agent isn't a luxury — they're a safeguard. An experienced agent can spot inspection issues, advise on offers, negotiate repairs, and help you avoid a bad deal. In the context of a $400K+ purchase, paying $4,000–$10,000 for that expertise is a minor line item. Weigh it against the stakes: a wrong home purchase can shift your family's finances for years.

As The Will Johnson Team often says, we're committed to constant and never-ending improvement in how we serve buyers. That includes adapting to post-settlement compensation models while staying focused on the core mission: making sure you buy the right home at the right price, not for a commission.

Ready to understand your options? Call our team at 615-265-1000. We'll walk you through current market compensation trends in your area, explain the buyer-agent agreement, and help you decide what representation model makes sense for your purchase. No pressure, just clarity.