The Impact of NAR Changes on Real Estate Agent Fees in 2026

What’s happening with real estate agent fees since the new NAR changes kicked in on August 17th? Are real estate agent fees on the decline? This article is going to fill you in on what’s going down due to the new NAR changes, and I’ll throw in a bit of history that you’ll likely find quite surprising. Here’s your handy dandy index:

NAR Changes

The recent NAR changes made by the National Association of Realtors (NAR) are all about providing transparency and protection for home buyers. Here’s how:

Fee Transparency

Now that buyer agents must have written buyer agreements in the form of a home buyer representation agreement that lays out their fees, real estate buyer agent fees will be clear. With agents needing this agreement before showing a home, home buyers will have upfront knowledge about the fees.

Negotiation Power

Instead of the fee being set by the home seller and offered to any agent through the MLS, buyers now can negotiate directly with their agent based on the value that their agent will provide.

These changes are steps in the right direction, ensuring the process is more transparent and fair.

Misconceptions About Buyer Agents

These new rules come at a time when many home buyers and sellers are undervaluing the role of buyer agents. They’re getting excited about the possibility of lower fees. After all, with home searches just a click away, it’s easy for them to think, “I’m doing all the work finding the home; the agent just opens the door and takes a big cut!”

I understand where they’re coming from. Before becoming an agent, I thought the same way. And now that I’m in the business, I know that some agents really don’t bring enough value to justify their fees, so sometimes I was right in my assumptions.

But here’s the reality: the old system didn’t help. Whether an agent was exceptional or just average, they got paid the same from the seller. But now, with these new NAR changes, buyer agents have to communicate the value they bring and justify their costs. The field just got a lot tougher, and that’s a good thing—fewer mediocre agents, more value for buyers!

Before becoming an agent, part of the reason I undervalued buyer agents was because I didn’t realize a few key things: that Buyer Agents Work on Contingency; that the “big number” on the closing statement and on their TV screens when they watch Million Dollar Listing isn’t the agent’s take-home pay; or that Buyer agents handle about 100 tasks for their clients behind the scenes.

These are all things you buyer agents out there now need to explain to home buyers. They really don’t know. Need some help with that? Check out our blog and videos about real estate buyer agent consultations.

Buyers Avoiding Buyer Agents

So, in my neck of the woods, and perhaps yours too, you may have heard that while these new NAR changes are a big win for home buyers, they’re also having an unintended consequence. More buyers are now approaching listing agents directly, skipping buyer agents altogether.

These buyers likely don’t realize what they’re missing out on. A good buyer agent can save them money, reduce their risk, and give them a much better chance of landing their dream home, especially in a competitive market.

And here’s the kicker—many of these DIY buyers think they’re saving money, but if things are playing out where you are the same way they are for me, listing agents are adding a fee in their contract with the seller to compensate them for doing some legwork that buyer agents would typically handle.

Well, that’s fair, but DIY home buyers don’t realize that they aren’t saving what they think they are.

History of Buyer Agency

So, how did we get here? With all the recent lawsuits, you likely know that real estate agent fees have hovered around 5% or 6% for a long time. How long? Since the 1940s.

But there was a big difference back then. Back in the day, the full 5% or 6% went to the listing agent. That’s right—the listing agent pocketed the whole commission because there were no buyer agents.

By the 1960s, listing agents realized they could sell more homes by offering a portion of their commission to other agents who would bring in lots of potential buyers. These agents, known as sub-agents, worked under the listing agent’s wing, splitting the commission in exchange for helping to market and sell the home.

Less money for the listing agent, sure, but also less work because the sub-agents handled a lot of the tasks. The trade-off made sense for listing agents.

This arrangement worked for a while, but it came with a major flaw. The sub-agents, while helping buyers, were actually representing the seller’s interests, not the buyers’. Even if a sub-agent never met the seller, their legal responsibility was to the seller.

This meant that buyers were often under the false impression that the agent showing them homes was working in their best interest when, in reality, they weren’t.

In fact, a 1983 FTC study revealed that 72% of buyers were under the false impression that the agents showing them homes were representing them.

By the early 1990s, this system started to crack under pressure. More and more buyers, realizing they had been left out in the cold without proper representation, began filing lawsuits.

In response to these lawsuits, the real estate industry came up with a solution—buyer agency. This new model allowed buyer agents to have a fiduciary duty to the buyer, meaning they could truly represent the buyer’s best interests. And, listing agents continued to split their commission with these hardworking buyer agents who helped them sell the house.

Why Sellers Will Continue to Pay Buyer Agents

With these new NAR changes, life has become a bit easier for home sellers too. Now, sellers sign listing agreements where they’re only obligated to pay their own agent’s fees. This makes sense, right?

But sellers can still agree, through negotiation with a home buyer, to cover the buyer agent’s fees too. The big question is, will they? I believe the answer is, of course they will! And here’s why:

• Attracting Buyer Agents: Buyer agency started because home buyers needed real representation, but it also benefited sellers by attracting more buyers. That fundamental reason hasn’t changed.
• Maximizing Buyers’ Budgets: When buyers put down larger down payments, they often qualify for lower interest rates, which saves them money and enables them to afford a more expensive home. Sellers want buyers to have more purchasing power, right?
• Tax Benefits: If sellers pay the buyer agent’s fees, it lowers their profit on paper, which can positively affect their taxes. So, there’s a financial incentive for sellers to consider covering those costs.
• Focus on Net Profit: At the day’s end, sellers only care about their net profit. It doesn’t matter whether they pay the buyer agent’s fee or not—it’s all about how much they walk away with after the sale.
• All this debate about whether sellers will pay is overblown. Even those who claim they’ll never pay a buyer agent’s fee will change their tune when they see they can net more money from the sale by doing so.

Will the New Rules Lead to Lower Prices?

First off, they’ve already gone down. Th president of the National Association of Realtors said, the “Average commission in the U.S. fell to a new low of 4.94% in 2020.” So, fees already dropped since online searches became the norm after 2008.

Will fees drop even more? My guess—not by much.

Impact for Listing Agents

For listing agents, nothing has changed, except they can pick up a higher pay by charging the seller for unrepresented buyers.

Full-Service Buyer Agents’ Fees

As for full-service buyer agents, we’ll probably keep charging 2.5-3% because, on average, we spend twice as much time per client as listing agents do. If we aren’t paid enough, it just doesn’t make sense for us to stay in the game.

Discount Agents

Buyers who want to save a buck can always go for discount agents, but you should let them know they’re likely sacrificing service quality. Evidence of that? Discount agents have been around for over a decade, and they haven’t taken over the industry. “Discount” is code for less service.

However, the rise of unrepresented buyers might lower overall fees slightly, but not by 2.5-3%. Those unrepresented buyers will once again, just like back in the days when the listing agent made the whole 5 – 6%, be paying for the listing agent to cover some of the work a buyer agent would normally do.

I wouldn’t be surprised if we soon see a wave of lawsuits from unrepresented buyers who didn’t fully understand the “cost” of going it alone or the risks of being taken advantage of. Sounds a lot like the 1990s all over again.

So, while I don’t foresee a significant drop in agent fees, these changes are a huge win for home buyers. They now have a clearer understanding of what they’re paying for, and buyer agents need to step up and clearly explain the value they bring to the table.

Agents who can’t or won’t do that will likely find themselves out of the business, which is ultimately great for the reputation of the real estate profession. So hang in there, communicate your value, and get ready for your greatest success ever.

That’s a Wrap

The recent NAR changes have increased transparency in real estate agent fees, requiring written agreements and giving buyers more negotiation power.

While this could lead to misconceptions about the value of buyer agents, it also pushes agents to better communicate their worth.

Despite some buyers attempting to bypass agents, the changes are unlikely to lead to a significant drop in overall fees. Ultimately, the new rules benefit both buyers and the industry by encouraging higher standards among real estate professionals.