A Clear, Updated Guide After the NAR Lawsuit Settlement
Every once in a while I hop onto a real estate discussion board online, and I start seeing the same questions asked again and again. One of the most common ones is simple but important. How do real estate agents actually get paid? And since the NAR lawsuit settlement brought so many industry changes, that question has been asked even more. So today I want to break it all down in a clear, straightforward way, using real data, local examples, and what I see every single week here in Lincoln and Placer County.
The real estate world has been buzzing with headlines, opinions, and even a little confusion, so let’s walk through what has truly changed, what has not changed, and what matters most when you are buying or selling a home today.
1. How Agent Compensation Used To Work
For years, the typical setup looked like this. Sellers would choose a commission and pay both their listing agent and the buyer’s agent from that amount. Buyers usually did not write checks to their agent. Although that structure made representation simple, it was not very transparent because many people did not understand who paid what and why.
That lack of clarity is a big part of why the industry is shifting today.
2. What Sparked the Change: The NAR Settlement
The lawsuits argued that the old system limited consumer choice. The settlement created rules that focus on transparency and consumer control. As a result, several important updates are now in place:
- MLS platforms cannot display buyer agent compensation publicly
- Buyers must sign a written representation agreement before touring homes
- Compensation conversations must be upfront and clearly explained
- Buyers now have multiple ways to compensate their agent
These changes aim to give buyers and sellers more clarity and flexibility.
3. So How Do Real Estate Agents Get Paid Now?
Even after all the changes, the structure did not flip upside down. In fact, in the Sacramento and Placer County region, the vast majority of transactions still involve the seller offering buyer-agent compensation. That is something Sacramento appraiser Ryan Lundquist has confirmed through his market conversations as well.
Source: Sacramento Appraisal Blog
Here are the three ways compensation works today:
Option A: The Seller Pays the Buyer’s Agent
This is still the most common path. Sellers often choose this to attract more qualified buyers and increase their chances of selling quickly.
Option B: The Buyer Pays Their Agent Directly
If the seller chooses not to offer compensation, the buyer and their agent negotiate a fee. Sometimes this can be added into closing costs.
Option C: A Combination
The seller covers part of the commission and the buyer covers the rest. This gives both sides flexibility.
4. What I See Locally: Real Commission Numbers
In Lincoln, Rocklin, and Roseville, commission rates vary. I regularly see listing-side commissions ranging from 1.5 percent up to about 4 percent, depending on the level of marketing, the property, and the goals. National data still shows overall commissions in the 5 to 6 percent range.
Sources: Bankrate, Kiplinger
So even though the rules changed, the actual numbers have not changed dramatically. What has changed is the level of transparency.
5. Why Commission Should Be About Value, Not Just a Percentage
Now more than ever, commission should be tied directly to value. You deserve to understand exactly what you are paying for. Not just the percentage but the strategy, systems, and services behind it.
Many agents still operate with a basic approach. However, clients deserve more than a sign in the yard and a cell phone photo.
Here is what I include that many agents do not:
- Free or reduced staging based on your home’s needs
- Professional interior and exterior photography
- Full Matterport 3D scan for every listing
- A custom property website for every home
- Professional video and lifestyle marketing
- Paid targeted social media ads
- Weekly seller updates and communication systems
- A pre-listing home preparation plan
- Neighborhood and lifestyle marketing
- Full project management from prep to close
- Lifetime Home Support after closing
- Free access to my rental properties for photography or staging needs when available
- Proven negotiation frameworks and strategy
- Extreme organization and over-communication so you never wonder what is happening
Your commission should pay for a strategy that supports your goals. It should not simply inflate an agent’s paycheck.
6. Questions To Ask Before Hiring an Real Estate Agent
Choosing the right agent matters more now than ever. Before you sign anything, take a moment to ask these questions so you know exactly what you are getting.
1. What specific services are included in your fee?
A strong agent should easily list their services. If the list is short, that is a red flag.
2. How much of the commission goes toward marketing?
Make sure the fee pays for real marketing, not just MLS entry.
3. What is your pricing and negotiation strategy?
You should hear about market data, buyer psychology, and a step-by-step process.
4. How often will you communicate with me?
Regular updates matter. You should never be left guessing.
5. What happens if my home does not sell quickly?
Your agent should have a backup plan, not just excuses.
6. What support do you offer after the sale?
Most agents disappear. I provide Lifetime Home Support, yearly check-ins, vendor help, upgrade guidance, and more.
7. What makes you different from other agents charging a similar fee?
Look for systems, organization, negotiation strength, and specific strategies. Clients work with me because I lead with clarity, structure, and a proven plan that makes selling or buying a much smoother and less stressful process.
7. How These Changes Protect Buyers
Because buyers now sign representation agreements before touring homes, they know exactly who represents them. They also know how their agent will be compensated before they fall in love with a property. This prevents confusion and increases trust.
8. How These Changes Impact Sellers
Sellers now have more flexibility in how they structure compensation. Offering buyer-agent fees often leads to more exposure and stronger offers, but the choice belongs to the seller. Compensation strategy now works hand-in-hand with pricing, presentation, and marketing.
9. What We Are Seeing in Today’s Market
Despite predictions of major disruption, our real-life market behavior has been stable:
- Sellers are still offering compensation in most transactions
- Buyers are more selective and value-driven
- Negotiations are clearer
- Compensation is more transparent
- Dual agency is decreasing because buyers want representation
The market is evolving, but the fundamentals remain strong.
Closing Thoughts
Real estate is changing, but people still want clarity, guidance, and an advocate who keeps their goals at the center of every decision. If you ever want to understand your options or get personalized advice on how compensation works in today’s market, I am here anytime. You can also learn more about who I am and how I work by visiting my About page.
And if you would like to explore the data behind compensation trends, check out Sacramento Appraisal Blog, an excellent resource from appraiser Ryan Lundquist.
Whenever you’re ready, I’d love to walk you through a custom strategy that fits your goals, budget, and timeline.
If you would like to learn more about my services, contact me at 916-367-8885
