Sellers No Longer to Pay Buyer Agent in 2026? Stay Calm!

What? Is this possible? Are we headed to a world where sellers no longer to pay buyer agent? If you haven’t heard, a flurry of court cases is shaking up the conventional norms surrounding how real estate commissions are paid in the real estate industry.

This is part 1 of our 6-part series to cover all the ins and outs of this historic time for the real estate industry. So, what’s the deal with these legal battles?

Are these cases about to flip our traditional real estate methods upside down? Will they slash our hard-earned earnings? And hold up, does this mean sellers might stop footing the bill for buyer agents? Buckle up because we’re diving deep into these questions and more!

In this comprehensive piece, we’ll use my experience as a past California attorney, now turned realtor, to delve into the intricacies of these legal challenges, decipher their implications for commission structures, and offer insights into the future of real estate compensation. Here’s our handy dandy index for easy navigation:

• Evolution of Real Estate Buyer Agents – How did we get here?
• Understanding How Buyer Agents Are Paid – How Commissions have worked
• Lawsuits Aiming to Change the Status Quo
•  What Brokerages Agreed to Do to End The Cases
• Sellers No Longer to Pay Buyer Agent?
• The Future of Real Estate Buyer Agents
• That’s a Wrap
• Frequently Asked Questions

Evolution of Real Estate Buyer Agents – How did we get here?

Before we get to the court cases, let’s consider how we got here. How has the real estate business already changed in the last decade or two?

The Digital Shift in the Real Estate Industry

Before the internet brought us online platforms like Zillow.com and Realtor.com, buyer agents were the sole gatekeepers of the local Multiple Listing Service (MLS), the magical vault where all potential homes for sale were listed.

As such it was buyer agents who conjured up home suggestions, orchestrated viewings, and guided buyers through the mystical world of real estate. Fast forward to today, and a staggering 90% of homebuyers start their quest online and many continue to use those platforms to be notified of new homes for sale that may interest them.

Thus, the digital revolution has democratized access to real estate listings and made it easy for everyone to know what homes are for sale with the exclusion of off-market listings which are still only known to agents.

Public Perception of Real Estate Agents Suffers

This seismic shift in knowledge about homes for sale ushered in a wave of public skepticism. The pervasive belief now is that agents might not be the champions of value they once were, given that buyers can easily see what homes are for sale and when those homes will have an open house for the public.

The skepticism has rebirthed older concerns as well like the thought that agents are not incentivized to bargain hard for their clients because agents earn a percentage of the sale price of a home.

However, any seasoned agent knows this narrative misses the mark entirely. The truth is, the slight variance in commission from negotiating down is minuscule compared to the paramount importance of closing the deal—securing that essential paycheck and covering the myriad costs already invested in the client.

Moreover, there’s a bigger picture — the long game. Exceptional service today means repeat business tomorrow and a stream of referrals, and agents need these to have a thriving real estate career.

Why would any agent jeopardize future referrals for a tiny bit more dough? Agents are in it for the long haul, deeply invested in their client’s satisfaction and their professional reputation, both of which are critical for sustained success in the ever-evolving world of real estate.

Public Perception Results in Criticism

However, here we are, the real estate waters are getting choppy with numerous lawsuits challenging the traditional commission structure. These legal disputes are rooted in a widespread public perception that real estate agents are paid too much.

In recent years, a significant number of lawsuits have emerged, all targeting the established norms of how real estate commissions are determined and disbursed.  Let’s talk about how commissions are generally determined and disbursed right now.

Understanding How Buyer Agents Are Paid – How Commissions have worked

Traditionally, when it comes to real estate transactions, it’s the home sellers who’ve been picking up the tab for the commissions of both buyer and seller agents. This has been the case for the last 100 years.

Here’s how it rolls out: The seller negotiates and signs an agreement to pay their listing agent some set percentage of the sale. The seller knows that the seller’s total percentage will include some agreed-upon percentage for the buyer’s agent as well.

When a property sells, the listing agent’s brokerage then shares a portion of this commission with the buyer’s agent.

Why does this system make sense?  Because with an offer of compensation for buyer agents, the selling agent ignites all the buyer agents, or let’s call them the worker bees, to sell the home. These bees buzz around opening doors and showing properties, all while being safeguarded by their brokerage’s liability insurance to ensure the homes are safe.

Now, dive into the world of the Multiple Listing Service, or MLS, where the plot thickens. There, buyer agents are offered a percentage of the sale – a percentage that can and does vary from property to property.

However, once listed in the MLS, an offer of buyer agent compensation is a binding promise, creating an obligation that the buyer’s agent will get paid despite that the buyer’s agent is not a party to the contract between the seller and the seller agent’s brokerage.

Lawsuits Aiming to Change the Status Quo

There is currently a flurry of lawsuits challenging the traditional framework of agent commissions, particularly focusing on the practice where sellers bear the cost of buyer agent fees.

These legal challenges allege that such arrangements unjustly inflate commission costs, and they accuse various industry players, including brokerages, realtor associations, and multiple listing services (MLSs), of colluding to enforce these fee structures, potentially breaching federal antitrust laws.

The spotlight recently turned to the landmark Sitzer/Burnett trial in Kansas City, a case that sent ripples throughout the real estate industry. The trial concluded with a groundbreaking verdict against the National Association of Realtors (NAR), finding them culpable of conspiring to inflate agent commissions.

This verdict wasn’t just another legal decision; it was monumental, marking the first instance where such a case concluded with a staggering $1.8 billion in damages awarded.

While the direct impact of this case is localized to the participants in Missouri, its implications are far-reaching. That’s because this landmark judgment is causing a wave of similar copycat lawsuits to pop up nationwide igniting a national reevaluation of how real estate commissions are structured and challenging the status quo of how brokerages and their agents are paid for the services they provide.

What Brokerages Agreed to Do to End The Cases

To solve the issues at hand, real estate players (associations, brokerage, and MLSs) have agreed to change their process, including removing any requirement that a seller must offer the buyer’s agent brokerage any compensation.

In the Nosalek case against an MLS, the MLS agrees to lower the minimum offer from the seller’s agent from 1 cent to $0.

So the players in these cases agree that sellers no longer need to offer buyer agents any offer of compensation and that the MLS involved will allow listing agents to fill out the field regarding a buyer agent’s brokerage compensation with a zero.

As similar lawsuits proliferate across the United States, it seems likely that these cases may set a new real estate standard for how real estate agents are paid.

But wait, what has happened in the courtrooms is not the biggest problem for buyer agents!

Sellers No Longer to Pay Buyer Agent?

The biggest problem stems from an opinion written to the judge of a case. The Department of Justice (DOJ) stepped into the spotlight in the Nosalek case by entering a “Statement of Interest” regarding the case’s proposed settlement.  By the way, the DOJ is not a party in this lawsuit, but this statement is allowed under US law, 28 U.S.C. § 517.

In that statement of interest, the DOJ urged the court to reject the proposed settlements and to instead require that sellers not be allowed to make any offer of compensation to buyer agent brokerages.

Why?  The DOJ argues that allowing sellers to offer any buyer agent broker commissions perpetuates a system where seller agents might pressure their clients into maintaining “customary” commission offers.

This pressure is driven by a seller agent’s concern that offering anything lower than the customary amount might lead buyer agents into “steering” (an illegal practice) their clients towards listings with higher offers of commission.

Therefore, the DOJ argues that as long as the door is open for sellers to offer buyer agent commission fees, there’s a risk that the status quo will remain unchallenged upholding business as usual, and nothing really changes.

The Future of Real Estate Buyer Agents

And there we are at the crux of the matter.  If the court adopts the DOJ’s proposal and then courts across the nation also adopt that court’s decision – which is very likely as that is how case law is made and can grow everywhere – then we see that this one court’s decision will have far-reaching consequences.

Sellers will no longer be allowed to make an offer of compensation to buyer agent brokerages and MLSs will no longer have a field that creates an obligation for the buyer agent to be paid for their services.

Does that mean buyer agents will cease to exist or that they won’t get paid moving forward?  Of course not!

We have more blogs coming out about this significant shift in the buyer agent business, what may occur, and how to handle it, so drop us an email with the subject line “newsletter” and we’ll add you to the list to be notified when our next blog drops.

That’s a Wrap

The real estate landscape is undergoing a seismic shift as court cases challenge the traditional norms of commission payments. While uncertainty looms over the future of real estate compensation, one thing remains clear: adaptation is key.

With each legal battle and policy change, agents must remain agile, embracing innovation and leveraging their expertise to thrive in this evolving industry. So, stay informed, stay proactive, and together, we’ll navigate these uncharted waters toward a brighter, more resilient future in real estate.