Real Estate Commissions and Agent Fees in Massachusetts After the NAR Settlement

Real estate commissions have been in the news since the National Association of REALTORS (NAR) settled a set of major lawsuits in 2024. Some of the headlines made it sound like everything changed overnight. In reality, a few important practices changed, and many things stayed the same. This guide explains, in plain language, how agent fees work today for Massachusetts sellers and buyers, what the state’s agency disclosure rules require, and what you should expect for the fee you pay.

What changed after the NAR settlement

NAR’s practice changes took effect on August 17, 2024. A federal court in Missouri gave the settlement final approval on November 26, 2024, and NAR agreed to pay $418 million over about four years. The two biggest changes are:

1. No offers of buyer agent compensation on the MLS. Listing agents can no longer post an offer to pay the buyer’s agent on the Multiple Listing Service. Sellers can still choose to offer compensation outside the MLS, and they can still offer buyers concessions, such as help with closing costs.
2. Written buyer agreements before touring. Agents who work with buyers and use an MLS must have a written agreement with the buyer before touring a home, in person or by live virtual tour. Simply visiting an open house on your own, or asking an agent about their services, does not require one.

What did not change

• Commissions are negotiable. They always have been. No law sets a commission rate, and NAR states that compensation is “negotiable and not set by law.”
• Sellers can still pay the buyer’s agent, directly or through a concession, if they choose to and the terms are agreed in the offer.
• Buyers can still have their own agent to represent them, and many do.

Buyer agreements: what they must say

Under NAR’s rules, a written buyer agreement must clearly state the agent’s compensation as a fixed amount: a flat fee, a percentage, or an hourly rate (it can even be $0). It cannot be open-ended or a range, and the agent cannot collect more than the agreed amount from any source. You can negotiate the services, the compensation, and the length of the agreement before you sign.

How seller concessions toward the buyer’s agent work

Since offers of compensation are no longer on the MLS, the question of who pays the buyer’s agent is now usually handled in the offer itself. Common approaches include:

• The seller agrees up front to pay a set amount to buyer agents, and the listing agent shares this when asked (but not on the MLS).
• The buyer asks in the offer for the seller to pay some or all of their agent’s fee, or to give a credit at closing.
• The buyer pays their own agent directly, under the buyer agreement.

For sellers, offering to cover some of the buyer’s agent fee can make your home affordable to more buyers, especially first-time buyers with limited cash. For buyers, asking the seller to help can lower your upfront costs. Fannie Mae and Freddie Mac have said that seller-paid buyer agent commissions do not count toward their limits on seller contributions, when that is the local custom. Your lender will confirm the rules for your loan type, since these agencies do not allow a commission to be added to the mortgage balance.

Massachusetts agency rules: who represents whom

Massachusetts requires every licensee to give you the Mandatory Licensee-Consumer Relationship Disclosure form. The form says at the top, “This is not a contract.” It must be presented at the first personal meeting where a specific property is discussed. If you decline to sign it, the agent still completes and keeps it.

The form explains your choices:

Dual agency and designated agency in practice

A dual agent cannot be fully loyal to both sides. Under Massachusetts rules, a dual agent may not tell the buyer that the seller would accept a lower price, or tell the seller that the buyer would pay more, and may not share either side’s motivation. Written consent must be obtained before dual agency happens, and no later than when the Offer to Purchase is signed. A Notice of Dual Agency is required when it actually arises.

Designated agency lets two agents at the same company each represent one side. The firm must keep each client’s information separate. In that setup, the appointing broker acts as a dual agent. Ask your agent which approach their office uses, so there are no surprises.

What you get for the fee

A commission pays for a lot of work, much of it behind the scenes. For sellers, a full-service listing agent typically provides:

• A pricing plan based on recent sales. See our pricing guide.
• Preparation and staging advice, professional photos, and marketing on the MLS and major sites.
• Showings, open houses, and screening of buyers and their financing.
• Negotiating the Offer to Purchase and the Purchase and Sale Agreement, which is the Massachusetts two-step process explained in our offer and P&S guide.
• Managing inspections, appraisal, the smoke and carbon monoxide certificate, and coordination with the closing attorneys.

For buyers, a buyer’s agent helps with the search, pricing advice, offer strategy, inspections, and the steps to closing.

Questions to ask before you sign

1. What is your commission, and what exactly does it include?
2. How long is the agreement, and how can it be ended?
3. Will you represent only me, or could this become dual or designated agency?
4. As a seller: do you recommend offering compensation or concessions to buyer agents, and why?
5. As a buyer: if the seller does not cover my agent’s fee, how will it be paid?

Want to see how commissions and other costs affect your bottom line? Use our seller net sheet and calculators and read our guide to seller closing costs.

How Luis can help

Luis and our team will explain our fees, your agency choices and every form before you sign anything, with no pressure. We are happy to walk through it all in English or Spanish. Start with a free 15-minute call through our contact page.