The NAR Settlement: What Changed for Houston Buyers and Sellers

As of this week, the practice changes from the National Association of REALTORS® settlement are officially in effect nationwide, and if you're buying or selling a home in Houston right now, a few things about the process are genuinely different than they were this time last year.

What the Lawsuit Was About

The settlement resolves a set of antitrust lawsuits, most prominently Sitzer/Burnett, that alleged NAR's rules around buyer agent compensation kept commission rates artificially high by requiring listing agents to make a compensation offer to buyer agents through the MLS. NAR reached a proposed settlement in March, agreeing to pay $418 million and to make structural changes to how MLS systems and REALTOR practices operate. Those practice changes took effect nationwide on August 17.

What Actually Changed

Two changes matter most for anyone in the middle of a transaction right now.

Buyer agent compensation is off the MLS. The field where listing agents used to enter what they'd pay a buyer's agent — historically around 2.5–3% in most markets — no longer exists on the MLS. Sellers can still choose to offer buyer agent compensation as part of their listing strategy, but it isn't advertised through the MLS anymore. That conversation now happens directly between agents, through the offer itself, or through other channels outside the listing system.

Written buyer representation agreements are now required. If you're touring homes with a REALTOR® who's an MLS participant, you'll sign an agreement before that tour, not after you've found a house you want to write an offer on. That agreement spells out what services you're getting, how your agent gets paid, how long the agreement lasts, and what happens if the seller doesn't offer buyer agent compensation.

What Didn't Change

Commission itself is still fully negotiable, the same as it always technically was. Sellers can still choose to offer buyer agent compensation as a concession, and in practice, most are still doing so, because a competitive offer to buyer agents is one of the more effective ways to get a property shown and sold. What's different is that the number isn't sitting on the MLS anymore, assumed and unstated by default. It's now a real conversation, in writing, before either side commits.

What This Means If You're Buying

Expect to sign a buyer representation agreement before your first showing, not your fifth. Read it. Ask what happens if a seller doesn't offer any buyer agent compensation on a house you love — some agreements specify you'd cover the difference yourself, others leave it open to negotiate at the time. This is a good-faith conversation to have with your agent up front, not something to discover at the offer stage.

What This Means If You're Selling

You're not required to offer buyer agent compensation, but choosing not to has real consequences for how many buyer agents actively show your property, since agents are now more likely to have an explicit conversation with their buyers about compensation before touring a listing that offers none. This is a strategic decision, not a formality, and it's worth talking through with your listing agent rather than defaulting to either extreme.

The mechanics of all this are still settling in as agents, brokerages, and MLS systems across the country adjust to a genuinely different way of doing business. I'll keep writing about how this plays out here in Houston specifically as more transactions move through the new process.