NAR Settlement Explained: What Buyers and Sellers Need to Know in 2026

If you’re buying or selling a home in California in 2026, the rules changed on how real estate agents get paid. The shift started with a class-action settlement the National Association of Realtors announced in March 2024 and fully took effect on August 17, 2024.

This isn’t a cosmetic change. It shifts how buyers choose an agent, how sellers price their listing, and how both sides negotiate. Here’s what’s actually happening in Southern California practice — not the headline version.

Background: what the lawsuit was about

The underlying class action (Burnett v. NAR and related cases) argued that the old MLS system effectively required sellers to pay the buyer’s agent. Here’s why: every MLS-listed property had a field for “cooperative compensation” — the amount the listing broker would pay the buyer’s broker. Buyers’ agents could sort and filter by that number, which plaintiffs argued forced sellers into a take-it-or-leave-it compensation model to get their listing shown.

The settlement didn’t declare commissions illegal. It prohibited two specific practices:

1. Offers of compensation to buyer-brokers on the MLS. That field is gone.
2. Unrepresented buyer home tours of MLS-listed property. Buyers now have to sign a written agreement with an agent before the agent can show them an MLS home.

Both are in effect nationally.

What changed for buyers

1. You sign an agreement before you tour

Under the California Association of Realtors’ Buyer Representation and Broker Compensation Agreement (BRBC), a buyer and their agent now put the relationship and compensation in writing up front.

The BRBC covers:

• Agency relationship — who the agent represents
• Term — how long (can be as short as a single showing)
• Services provided — tours, offer-writing, negotiation, transaction management
• Compensation — what the agent is paid, and who’s paying (buyer, seller, or a combination)
• Dual agency disclosure — if the agent also represents the seller, this is flagged

You can sign a short-term BRBC for a single property, evaluate how the agent works, and extend or switch after.

2. You might pay your agent directly — or you might not

Here’s the part that gets oversimplified. In California in 2026, three common structures exist:

• Seller covers the buyer’s agent. The seller offers a concession at closing — often 2%–2.5% of sale price — which the buyer applies toward their agent’s fee. This is still very common.
• Split structure. Seller covers part, buyer covers the rest. Common when the seller’s offered concession is less than the buyer-agent’s agreed fee.
• Buyer pays their own agent. Less common, but growing on luxury properties and FSBO purchases. Buyer negotiates and pays the agent out of cash-to-close or, in some cases, wraps it into the loan (allowed under recent Fannie Mae and FHA guidance, with limits).

When we sign a BRBC, we fill in the buyer-agent fee clearly. Then when we analyze each property, we check what the seller is offering. If there’s a gap, we have three options: negotiate the offered concession up, the buyer brings the difference, or we look at the next property.

3. No more “free buyer’s agent” illusion

The old talking point — “the seller pays your agent, so using a buyer’s agent is free” — was never quite true. The cost was baked into the home price. What changed is that now buyers see the number on paper and think about whether it’s worth it.

My honest take: in a California market with 10+ pages of contract, multi-week contingency periods, and median prices over $700,000 in most markets, trying to navigate a purchase without an experienced buyer’s agent is penny-wise and pound-foolish. But you should know what your agent costs and what they’re delivering.

What changed for sellers

1. You still decide whether to offer buyer-agent compensation

Nothing in the settlement prevents you from offering a concession toward the buyer’s agent fee. It just can’t be advertised on the MLS.

Your listing agent will ask: “Are you willing to offer a seller concession toward buyer-agent compensation, and up to how much?” Your options:

• Yes, up to [X]% — your agent can tell buyer’s agents verbally or in the marketing package (property flyer, MLS public remarks, listing website).
• Yes, but only on the offer — buyers can request it when they write the offer; you negotiate then.
• No concession — you’re not offering anything, buyers pay their own agent.

In a typical California market in 2026, sellers who offer no concession do see fewer showings and fewer offers. This isn’t agents retaliating — it’s buyers self-selecting out of listings that cost them more cash.

2. Price your home knowing buyers are doing this math

If the market-supported price is $650,000 and the market-expected buyer-agent concession is 2.5%, many buyers will mentally model: “This home costs me $650,000 + $16,250 for my agent = $666,250.” Your offered concession is, practically, price.

Some sellers prefer to price higher ($665,000) with a 2.5% concession offered, rather than price at $650,000 with no concession. Both can net the seller the same amount — but the first version gets more showings, more offers, and often a higher final sale price because of perceived room for negotiation.

3. Listing agreement changes

The C.A.R. Residential Listing Agreement (RLA) was updated. You now explicitly authorize or decline a specific compensation offer to buyer agents, and the document spells out clearly that any offer is off-MLS.

What didn’t change

Plenty. Despite the headlines, these didn’t shift:

• Total transaction cost. Total agent compensation is in roughly the same range, just negotiated differently.
• Agency duties in California. Buyer’s agents still owe fiduciary duties to buyers. Listing agents still owe them to sellers. Dual-agency disclosure rules per California Civil Code §2079 are unchanged.
• The MLS. It still exists, still lists properties, still drives most California transactions. The compensation field is what’s gone — not the listing platform.
• Broker license requirements. CA DRE licensing, continuing education, trust fund rules, and broker supervision obligations are all unchanged.

California-specific implementation

California was relatively well-prepared. The C.A.R. rolled out new forms — BRBC, updated RLA, updated RPA — on July 24, 2024, roughly three weeks before the national deadline. Most California brokerages trained agents through July and early August, so by August 17 the paperwork transition was ready.

Two California wrinkles to know:

1. Dual agency is legal but requires written consent from both parties, per California Civil Code §2079. Under the new forms, dual agency disclosure is tighter — the BRBC specifically flags whether your buyer’s agent might also represent a seller you make an offer on.

2. Listing agents talking to unrepresented buyers is where compliance gets tricky. If a buyer shows up to an open house without an agent, the listing agent can show the home — but can’t act as the buyer’s agent without formal dual-agency disclosure. We’ve seen some buyers try to use this as a way to avoid signing a BRBC. In practice, the listing agent represents the seller in that conversation, and the buyer is unrepresented — not a great negotiating posture.

What buyers should ask their agent in 2026

1. “What do you charge and how is that documented?”
2. “Will you work on a per-showing BRBC first so I can evaluate fit?”
3. “How do you check what the seller is offering before we see a home?”
4. “If the seller isn’t offering enough to cover your fee, what are our options?”
5. “How do you track your fiduciary duties to me — in writing?”

What sellers should ask their agent in 2026

1. “Given my target sale price, what’s the market-expected buyer-agent concession in this ZIP?”
2. “What’s your plan if we offer no concession and showings stall?”
3. “How do you present my offered concession in the listing marketing?”
4. “Can we test different concession structures if the first pass doesn’t generate offers?”
5. “How do you handle dual-agency offers where your brokerage represents both sides?”

The bigger picture

The settlement didn’t destroy the real estate profession, and it didn’t collapse commissions. What it did do is make the compensation conversation explicit. Buyers and sellers who treat it like any other negotiable term — not a fixed given — come out ahead.

For sellers, the question is: “How do I price and market so I get to my net number?”

For buyers, the question is: “What does an agent actually cost me, and is the work they’re doing worth that?”

Either way, you’re better off working with someone who treats the math as a real conversation and not a script.

Primary sources cited

• National Association of Realtors settlement filing — nar.realtor
• California Association of Realtors forms and updates — car.org
• California Civil Code §2079 (agency disclosure)
• California Department of Real Estate — dre.ca.gov

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Not sure how the new rules affect your buy or sell? That’s fair — the transition is still shaking out in every local market. Call me at (626) 548-4483 or book a free consultation. I’ll walk you through what the current compensation landscape looks like for your exact price point and ZIP code — and if you’re selling, we’ll work through whether offering a concession makes sense for your goals.