How Do Real Estate Commissions Work Now?

If you've bought or sold a home on the North Shore any time before 2024, you probably never thought much about how your agent got paid. It just happened in the background. Lately, though, I'm getting the same question from buyers and sellers in Beverly, Salem, Danvers, and every town in between: "Didn't real estate commissions change? Do I owe my agent money now?"

The short answer is that yes, something real changed — but not the thing most people assume. Commissions weren't eliminated, and nobody set a new government-mandated rate. What changed is how those fees get discussed, disclosed, and agreed to, and when that conversation happens. I've been doing this since 2000, and this is genuinely one of the more meaningful shifts in how the transaction works that I've seen in 25 years — mostly because it moves a conversation that used to happen quietly, now happens openly, and earlier.

Here's what's actually going on, in plain language.

What Changed on August 17, 2024

The National Association of REALTORS® (NAR) settled a group of antitrust lawsuits — often referred to by the case names Sitzer and Burnett — that argued the old system for sharing commissions between listing agents and buyer's agents kept those fees hidden from consumers and artificially uniform across the industry. As part of that settlement, two practice changes took effect nationwide on August 17, 2024, including here in Massachusetts.

1. Buyer agent compensation can no longer be advertised on the MLS

Here on the North Shore, that means MLS Property Information Network (MLS PIN) — our primary MLS — removed the field where listing agents used to publish what they were offering to a buyer's agent. That figure can't appear in the public listing, and it can't appear in agent-only remarks either. It's simply not part of the MLS anymore.

2. Buyers now sign a written agreement before touring homes

Before an agent affiliated with the MLS shows you a home, you're expected to sign a written buyer representation agreement. In Massachusetts, that's often the MAR Form 800 or a brokerage's equivalent. It spells out what services your agent provides, how they're compensated, and by whom — before you ever walk through a front door together.

What Didn't Change (and the Myth Worth Retiring)

The most common misunderstanding I hear is that buyer's agents "used to be free" and now suddenly cost money. That was never actually true. Commission rates were never set by the MLS, by NAR, or by any law — they were always negotiable between a seller and their listing agent. What the old system did was make that fee largely invisible to buyers, because it was built into the transaction and shared with the buyer's agent through the MLS without much discussion.

Sellers can still choose to offer to pay some or all of a buyer's agent's fee. That option hasn't gone away, and plenty of sellers still choose it, because it keeps the pool of buyer's agents willing to show a home as wide as possible. What's different is where and how that offer gets made — it's now negotiated directly and documented in the purchase contract, rather than published as a standing offer inside the MLS for every agent to see.

How It Works for Buyers Now

Before your agent shows you a single home, expect to sign a buyer representation agreement. Read it before you sign it. It should clearly answer three things:

What services does your agent actually provide? Search assistance, scheduling, contract negotiation, guidance through inspection and closing — a good agreement spells this out rather than leaving it vague.

How is your agent paid, and by whom? That compensation can still come from the seller as part of the deal (most common), from a concession negotiated into your offer, or directly from you (usually in cash sales, or in the very rare situation where the seller refuses to pay your buyer agent's fee). Which path makes sense depends on the specific listing and the specific offer you're writing — which is exactly why this conversation now happens up front instead of being assumed.

How long does the agreement last, and how do you end it if it's not working? Term length and termination terms are negotiable. If an agreement feels open-ended or one-sided, ask questions before you sign.

How It Works for Sellers Now

As a seller, you still negotiate your listing agent's commission the same way you always have — nothing about that part of the process changed. What's different is the decision about whether, and how, to offer compensation to a buyer's agent as part of your marketing strategy.

You can still choose to offer buyer-agent compensation. Many sellers do, precisely because it keeps more buyer's agents comfortable showing the home. That offer simply isn't published on the MLS anymore — it gets communicated directly, agent to agent, or built into how offers are structured and negotiated once they come in.

Frequently Asked Questions

Jim Armstrong

REALTOR® | SRES® | ABR® | GREEN | Massachusetts Certified Real Estate Instructor

Jim has served North Shore buyers and sellers since 2000 and leads the Armstrong Field Group at Aluxety Real Estate. His grandmother, Lillienne I. Field, founded Field Real Estate in Salem in 1944 — the same values of honesty and straight answers still guide how Jim explains the process today.

This article is for general educational purposes and reflects practice changes resulting from the 2024 NAR settlement as understood at the time of publishing. It is not legal, financial, or tax advice. For questions about a specific contract or agreement, consult a licensed Massachusetts real estate attorney.