How the New Buyer’s Agent Commission Rules Affect New York Home Buyers and Sellers

The 2024 settlement of antitrust litigation against the National Association of Realtors (NAR) brought significant changes to how buyer’s agent compensation is structured and disclosed in real estate transactions nationwide. If you’re buying or selling in New York, these changes affect how the transaction is organized – and in some cases, how you should approach negotiations.

What Changed and Why

Prior to the settlement, it was standard practice in most markets for the seller’s listing agreement to specify the total commission, which the listing brokerage then shared with the buyer’s brokerage. Buyers typically didn’t sign any agreement with their agent, and the buyer’s agent compensation came from the seller’s proceeds without explicit negotiation.

The settlement changed this framework in two key ways:

Buyer representation agreements. Buyers are now required to sign a written agreement with their buyer’s agent before touring homes. This agreement specifies the buyer’s agent’s compensation and establishes the formal representation relationship. Buyers can no longer work with agents without this documented agreement.

Seller-side commission offers removed from MLS. The practice of listing buyer’s agent compensation offers in the MLS was eliminated. Sellers can still choose to offer buyer’s agent compensation as part of their transaction – and many do, as a strategy to attract more buyer interest – but that offer is no longer communicated through the MLS itself.

What This Means for Sellers

Sellers now have explicit choices about whether and how much buyer’s agent compensation to offer. Offering competitive compensation for buyer’s agents remains a marketing strategy – a seller who offers strong buyer’s agent compensation is creating an incentive for agents to show their listing – but the decision is now explicit and documented rather than baked into a standard commission structure.

Sellers who offer no buyer’s agent compensation are essentially requiring buyers to either pay their agent separately or to purchase without representation. In New York’s complex attorney-state transaction environment, buyers without agent representation is unusual and creates its own complications.

From a negotiating standpoint, buyer’s agent compensation can now be a specific item in the offer and counteroffer process – buyers can request seller-paid buyer’s agent compensation as part of their offer terms, just as they request seller concessions for closing costs.

What This Means for Buyers

Buyers now need to have an explicit conversation with their agent about compensation before beginning their home search – and before touring any homes. The buyer representation agreement specifies how the agent will be compensated: from the seller’s contribution, from the buyer directly, or from some combination.

If a seller is not offering buyer’s agent compensation, and the buyer’s agent’s compensation requirement exceeds what the seller is offering, the buyer must either cover the gap out of pocket, negotiate for the seller to cover it, or work with an agent who accepts a lower fee.

Buyers should understand their representation agreement before signing it – specifically, what the agent’s compensation requirement is, how it’s paid, and what happens if they purchase a property where the seller is offering less than the agreement specifies.

The New York Reality

In New York’s market, full buyer’s agent compensation being covered by the seller remains common as of this writing, because sellers who want maximum buyer-agent interest in their property continue to offer it. The practical change is transparency and documentation – what was implicit is now explicit.

For buyers, the most important new step is having a clear conversation with their agent about the representation agreement before touring begins. For sellers, the most important new consideration is factoring buyer’s agent compensation into their listing strategy as a deliberate decision rather than a default.

I provide full transparency to every client I work with about how compensation works and what we’re agreeing to – on both the buyer and seller side. The changes in this area make that conversation even more important. Call me at (321) 447-4259 or visit movewithricky.com.

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Rakesh (Ricky) Khanna | Licensed Real Estate Salesperson
Better Homes and Gardens Real Estate Realty Connect
Call or text: (321) 447-4259 | movewithricky.com