New NYC Real Estate Commission Rules Explained
What Buyers and Sellers Need to Know Today
On August 17, 2024, the way real estate commissions work in New York City changed. Not dramatically, not catastrophically, but in ways that matter if you are buying or selling property. The headlines made it sound like the industry was being dismantled. The reality has been considerably more mundane, and more worth understanding.
Here is what actually changed, what it means in practice, and what has not changed at all.
How It Used To Work
For decades, the standard structure in New York City was straightforward. Sellers paid a single commission, typically 5 to 6% of the sale price, which was then split between the listing agent and the buyer's agent. The buyer's agent got paid by the seller. The buyer got representation without writing a check for it. Everyone understood the arrangement, even if it was rarely discussed explicitly.
That arrangement ended in 2024, following a national settlement reached by the National Association of Realtors (NAR).
What the NAR Settlement Actually Changed
Three things shifted on that date:
Commissions were decoupled. Listing brokers can no longer offer compensation to buyer's agents through the MLS. What was once a standard line in every listing agreement is now a separate negotiation. Sellers are no longer expected to pay the buyer's agent by default.
Buyer agency agreements became mandatory. Before touring a property, buyers must sign a written agreement with their agent outlining the scope of representation and how the agent will be paid. This was always good practice. Now it is required.
The traditional 5 to 6% split was disrupted. Not eliminated, but disrupted. Sellers can still choose to offer buyer agent compensation, and most still do. But it is now a deliberate decision rather than an assumed one, and it shows up differently in how deals are structured and negotiated.
The Real Estate Board of New York updated its own rules to align with the national changes, requiring that buyer agent compensation be negotiated directly rather than embedded in the listing agreement.
One thing worth clarifying because it comes up constantly: these changes apply to sales only. The FARE Act, which shifted rental broker fees from tenants to landlords, is a separate law that took effect on June 11, 2025. The two are frequently conflated but operate completely independently.
What This Means for Buyers
You now sign a representation agreement before you tour a property. That agreement tells you who represents you and what it costs. For most buyers, this is a formality that confirms what was always true. For some, it is the first time they have had an explicit conversation about how their agent gets paid.
In most Brooklyn transactions, sellers still offer compensation to a buyer's agent. The reason is simple: listings that offer clear buyer agent compensation attract more qualified buyers, generate more interest, and tend to close faster and at stronger prices. Sellers who don't offer compensation narrow their buyer pool. In a market where most serious buyers are working with representation, that is a meaningful disadvantage.
What This Means for Sellers
Commission structure is now part of your marketing strategy, not an afterthought. The decision of whether to offer buyer agent compensation, and how much, deserves the same attention as pricing and presentation.
Most Brooklyn sellers continue to offer it. Not because they have to, but because it works. A listing that reaches every qualified buyer in the market is worth more than one that reaches only the buyers whose agents are willing to show it on spec. The math is usually straightforward.
What Has Not Changed
The process of buying and selling real estate in New York City is largely the same as it was before August 2024. The paperwork is heavier. The conversations happen earlier. The assumptions are now explicit rather than implied.
What has not changed is this: good representation still matters, the best outcomes still require accurate pricing and thoughtful strategy, and the market still rewards sellers who do the work and punishes those who don't. The rules around how agents get paid have shifted. What makes a transaction successful has not moved an inch.
Work With Craig
If you're buying or selling in Brooklyn and want a clear picture of how commissions work in the current environment, I'm happy to walk you through it.
