How the New NAR Buyer Broker Compensation Law Is Reshaping Real Estate in 2025

The real estate landscape is experiencing one of its biggest shifts in decades. On August 17, 2024, the National Association of Realtors’ (NAR) new buyer-broker compensation law officially went into effect — fundamentally changing the way commissions are structured in real estate transactions.

For years, sellers typically paid the commissions for both their listing agent and the buyer’s agent. Under the new rules, that’s no longer guaranteed. Now, buyers may need to directly negotiate and pay their agent’s commission. It’s a dramatic change that brings new responsibilities — and opportunities — for buyers, sellers, agents, and brokerages alike.

What This Means for Real Estate Agents in Los Angeles

Buyer’s agents will now need to sit down with clients early to negotiate fees and outline expectations. Instead of relying on sellers to cover their costs, agents must highlight their value upfront, creating more transparency in the process.

For listing agents, the shift means taking on new responsibilities — helping sellers understand and navigate scenarios where buyers may need to cover their broker fees. This reality may also adjust how Los Angeles homes are marketed, with sellers having to plan for varying commission negotiations.

No More Commission Disclosure in MLS

In Los Angeles’ highly competitive market, one of the biggest changes is that commission offers to buyer’s agents can no longer be displayed through the Multiple Listing Service (MLS).

Previously, agents could see commission percentages tied to listings in the MLS, but removing this practice aims to eliminate commission-driven bias in the home search process. While this levels the playing field for buyers, it also adds a new layer of negotiation for agents.

Buyer Representation Agreements Are Now Required

Before any home tours can take place, buyer agents must have signed representation agreements with their clients.

These agreements clearly outline the scope of services, commission discussions, and buyer responsibilities. While it may feel like added paperwork, it ensures both parties go into the process with clarity — setting the stage for stronger working relationships.

How Brokerages Are Responding in 2025

Brokerages across Los Angeles are adjusting quickly. Many are introducing flexible compensation models, such as flat-fee arrangements or performance-driven options, and making commission splits more transparent.

Some are even providing education sessions for buyers and sellers to help them understand the changes, while others are experimenting with incentives like rebates. The goal? To stay competitive in a rapidly changing market environment.

The Role of Technology

Technology is stepping in as a major player in handling these changes. Tools like digital commission calculators, negotiation platforms, and automated contract systems are becoming essential.

For buyers and sellers, this means faster, more transparent deals. For agents, it reduces paperwork and makes it easier to juggle multiple transactions in L.A.’s fast-paced real estate scene.

What Buyers and Sellers Can Expect Going Forward

The NAR buyer-broker compensation law is still new, and its full impact will continue evolving. What’s clear is that real estate in Los Angeles is moving toward greater transparency, flexibility, and client-focused service.

Buyers and sellers may soon have more options in how they structure their transactions, while agents will compete not just on expertise and market knowledge, but also on how they structure and communicate compensation.

This isn’t just a commission change — it’s the start of a new era in how homes are purchased and sold in Los Angeles.

Work With the Local Experts in Los Angeles

At RIM Property Group, we don’t just keep up with change — we help our clients thrive through it. Based in Los Angeles and serving the Greater L.A. and San Fernando Valley areas, our team combines deep local expertise with innovative strategies to guide you through today’s evolving real estate market with clarity and confidence.

Thinking about buying or selling under the new rules? Let’s connect. Contact RIM Property Group today and experience real estate designed for the way business is done in 2025.