What Changed After the NAR Lawsuit?
The lawsuit involving the National Association of Realtors (NAR) challenged long-standing practices around how buyer agent compensation was offered and communicated.
For years, most buyers experienced a similar process:
The seller hired a listing agent
The seller agreed to a total commission
That commission was typically shared with the buyer’s brokerage
Buyers rarely saw a separate charge for their agent and often assumed buyer representation was “free”
After the lawsuit and subsequent settlements, the industry shifted toward greater transparency and negotiation, especially around compensation and written buyer representation agreements.
How Buyer Agents Are Paid Today
In many cases, sellers still pay buyer agent compensation
This remains common in many markets because it:
Encourages showings
Attracts more qualified buyers
Helps listings remain competitive
But it is no longer guaranteed
Depending on the seller and the property:
Compensation may still be offered
It may be offered at a reduced amount
Or it may not be offered at all
If the seller does not offer buyer agent compensation—or offers less than what’s agreed to—the buyer may be responsible for paying some or all of their agent’s compensation out of pocket.
This doesn’t mean buyers will have this cost. It means buyers should plan for the possibility rather than be surprised later.
A New Budget Item Buyers
Should Be Aware Of
Most buyers already plan for:
Down payment
Closing costs
Inspections and appraisal
Moving expenses
Now, buyers should also be aware of one additional potential cost:
Buyer agent compensation, if it is not paid by the seller
Being prepared is not pessimistic—it’s smart planning.
Why Representation Matters
More Than Ever
Compensation is only part of the story. Who actually represents you is just as important.
A critical clarification
Not all agents are automatically subagents of the seller anymore. Subagency still exists in some states, but it is not automatic and often requires specific disclosure or agreement.
However—and this is the key takeaway:
👉 Buyers should never assume the real estate professional they are speaking with represents them, even if that person is not the listing agent.
What Happens If a Buyer Is Not Represented?
In many markets:
The listing agent represents the seller
An agent showing a home without a buyer representation agreement may:
Represent the seller
Act as a subagent of the seller (where allowed)
Act as a transaction broker or facilitator with limited duties
If an agent does not represent you, they may not be obligated to protect your confidential information.
Buyers should use caution when sharing:
Their maximum budget
How badly they want the home
Deadlines or urgency
Willingness to pay over asking
Any negotiating “bottom line”
Even casual comments can weaken your negotiating position if shared with the seller.
Why Having Professional Buyer Representation Is Still Worth It
Even if a buyer may need to contribute toward their agent’s compensation, professional representation often protects far more money than it costs.
1. Protection of Confidential Information
A buyer’s agent keeps your financial and personal details confidential and safeguards your negotiating position.
2. Negotiation That Can Offset the Cost
A skilled agent can negotiate:
Price
Seller concessions
Repairs or credits
Favorable terms
Even small wins can exceed the cost of representation.
3. Contract Knowledge Prevents Costly Mistakes
Real estate contracts are legal documents with strict deadlines and consequences. Professional guidance helps protect earnest money, inspection rights, and contingencies.
4. Inspection and Repair Guidance
Buyer’s agents help you understand what matters, what doesn’t, and how to respond strategically—preventing costly overreactions or missed red flags.
5. Coordination With Your Lender and Other Parties
Experienced agents keep transactions on track by coordinating with lenders, inspectors, appraisers, and title companies—reducing delays and surprises.
6. Market Knowledge Helps Prevent Overpaying
Understanding local pricing and comparable sales helps buyers avoid emotional decisions and structure competitive—but smart—offers.
7. Emotional Objectivity
Buying a home is emotional. A buyer’s agent provides calm, objective guidance to help you make sound decisions.
8. Clear Loyalty
Most importantly, a buyer’s agent works for you—with loyalty, advocacy, and clear alignment to your interests.
How Buyers Can Protect Themselves
A few simple steps make a big difference:
Ask early: “Who do you represent in this transaction?”
Ask directly: “Will anything I share with you be kept confidential from the seller?”
Understand what you sign: Buyer representation agreements clarify duties, confidentiality, and compensation
Coordinate with your lender and agent: Alignment avoids last-minute financial surprises
The Bottom Line
Today’s real estate market isn’t worse—it’s simply more transparent.
Many sellers still pay buyer agent compensation
Some may not
Buyers should plan for the possibility of an out-of-pocket cost
And buyers should never assume an agent represents them without confirmation
When buyers understand both compensation and representation upfront, they make better decisions, negotiate from a stronger position, and avoid unnecessary surprises.
An informed buyer is a confident buyer—and that’s the goal in any market.