Post-NAR Settlement Commission Strategy

Overview

The 2024 NAR settlement fundamentally altered how buyer broker compensation is structured in residential real estate. The settlement eliminated mandatory offers of compensation through MLS systems and required buyers to enter written agreements with their agents before touring properties. In NYC, where REBNY co-brokerage rules historically governed commission sharing, the settlement is reshaping how sellers, listing agents, and buyer's agents negotiate compensation. Understanding the new landscape is essential to making informed decisions about whether to offer buyer broker compensation and how it affects your buyer pool.

Key Strategy

Commission is one of the largest controllable seller costs - and post-NAR, it deserves scrutiny. On a $2,000,000 sale, the difference between a 3% listing-side fee and a 1% listing fee is $40,000 - before considering buyer-side compensation, transfer taxes, or any other cost. Sellers should evaluate listing-side commission against execution quality and net proceeds, not simply accept a legacy rate structure.

The old 2-3% listing-side fee is not automatically justified in a software-enabled brokerage environment. Technology has reduced the marginal cost of marketing coordination, showing management, transaction tracking, and client communication. A brokerage that uses software to structure these processes can deliver full-service execution at a lower fee - not by removing the work, but by making the work more efficient.

A low fee alone is not enough. The seller still needs pricing intelligence, professional marketing, structured follow-up, negotiation strategy, and transaction management. Discount brokerages that simply reduce commission without maintaining execution quality shift risk back to the seller. The relevant question is not "what is the cheapest fee?" but "what model produces the highest risk-adjusted net proceeds?"

You now have three options for buyer-side compensation. Option one: continue offering buyer broker compensation (typically 2-3%) communicated in broker remarks, maintaining the broadest buyer pool - this remains the dominant practice for co-op listings where agent guidance through the board process is particularly valuable. Option two: reduce or eliminate offered compensation, lowering your total commission cost but risking a narrower buyer pool since agents may deprioritize properties that do not compensate them. Option three: negotiate compensation as part of the offer, shifting the discussion to the offer stage and giving you flexibility to evaluate it within the overall deal economics.

What To Do

Have your listing agent analyze what comparable listings in your market are offering for buyer broker compensation - this is your competitive benchmark. In the current transitional period, the safest strategy for most sellers is to continue offering competitive rates, since the cost is embedded in existing market expectations and eliminating it risks reducing your buyer pool without proportional savings. If you choose to reduce or eliminate the offer, prepare for potentially reduced showing traffic, particularly from agents with representation agreements requiring minimum compensation. Monitor market trends - as buyer-paid compensation becomes more normalized, you may have greater ability to restructure.

Common Mistakes

Eliminating buyer broker compensation without analyzing the competitive landscape and potential impact on showing traffic. Assuming that eliminating the buyer agent commission translates directly to higher net proceeds when it may reduce the sale price by more than the commission saved. Failing to communicate your compensation offer clearly when it is no longer visible in the MLS. Not understanding that buyer representation agreements now require buyers to commit to their agent's compensation before touring - making your property's compensation terms a factor in which homes get shown.

Accepting a high listing-side commission without asking what you are receiving for the fee. Post-NAR, sellers should demand transparency: what specific marketing, pricing analysis, follow-up process, and transaction management does the fee include? If the answer is vague, the fee may not be justified.

How Botway Handles This

Botway's 1% listing fee is designed to answer the question the NAR settlement raised: what should brokerage compensation look like when sellers demand transparency, execution quality, and better economics?

Botway is not a discount broker. It is a software-backed brokerage that delivers full-service seller representation - pricing intelligence, professional marketing, structured buyer follow-up, offer comparison, deal-risk tracking, and transaction management - through a more efficient operating model. The 1% listing fee preserves the execution sellers need while materially improving net proceeds.

Post-NAR, the right question for sellers is not "should I pay less?" It is "what am I actually receiving for the fee - and does the model produce better outcomes?" Botway is built around that calculation.

Frequently Asked Questions

Do I have to offer commission to the buyer's agent?

After the NAR settlement, sellers are no longer required to offer buyer broker compensation through the MLS. However, not offering compensation may reduce the pool of buyer agents willing to show your property. Many sellers still offer competitive buyer broker compensation as a strategic choice to maximize exposure. The key is understanding that this is now a negotiable business decision, not a mandatory practice - evaluate the trade-off for your specific market.

How has the NAR settlement changed real estate commissions?

The NAR settlement eliminated the requirement to offer buyer broker compensation through MLS listings and mandated that buyers sign written agreements with their agents before touring homes. Sellers now have explicit choice in whether and how much compensation to offer. This shifts commission negotiation from a pre-set industry default to a case-by-case business decision, creating both opportunity and complexity for sellers positioning their listings competitively.

Will eliminating buyer agent commission save me money?

Not necessarily. If removing the commission reduces your buyer pool and showing traffic, the resulting lower sale price or extended time on market may cost more than the commission you saved. A 2.5% commission on a $2M property is $50,000 - but if fewer showings result in a price reduction of $75,000 - $100,000, the net outcome is worse. Analyze your specific competitive landscape before deciding.

How do buyer representation agreements affect my listing?

Buyers must now sign written agreements with their agents specifying compensation before touring properties. This means buyers are aware of their agent's fee before they see your home - making your compensation offer a factor in which listings get shown. Properties offering competitive buyer broker compensation remain easier for agents to show without requiring buyers to pay additional out-of-pocket costs on top of their purchase.

What are most NYC sellers offering for buyer broker compensation right now?

In the current transitional period, most NYC sellers continue offering 2-3% buyer broker compensation, communicated through broker remarks or listing descriptions rather than the MLS. This remains the dominant practice particularly for co-op listings, where buyer agent guidance through the board approval process is especially valuable. Monitor what comparable listings in your building and neighborhood are offering - that is your competitive benchmark.

How much commission do I pay to sell my apartment in NYC?

Commission is negotiable and varies by brokerage model. Traditional full-service brokerages typically charge 5-6% total (split between listing and buyer agents). Post-NAR settlement, sellers have more flexibility in structuring both sides. A software-backed brokerage like Botway charges a 1% listing fee while providing full-service representation. Buyer-side compensation - typically 2-3% - remains a separate strategic decision based on your competitive landscape and buyer pool goals.

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This article provides general educational information only. It is not legal, tax, financial, insurance, compliance, housing, brokerage, or professional advice. Rules, tax rates, obligations, enforcement practices, and market conditions vary by property, building, contract, municipality, and jurisdiction, and they change. Sellers should consult a qualified attorney, CPA, or other appropriate professional before making decisions based on their specific situation.