It’s already difficult enough to buy your first home. Between legalese, inspections, financing—and the high interest rates and home prices—prospective new homeowners enter the process with a lot to learn and a multitude of risk factors.

This is where having a competent, dedicated buyer’s agent can be particularly helpful. I learned this all too well after a monthslong search for a home was nearing completion. My realtor negotiated with the seller to make certain repairs or reduce the price, and recommended a smart inspector who was familiar with the building’s typology and quirks; she even shouted at the guy scoping the sewer for doing a half-assed job. It all relayed the importance of the agent, who provides technical assistance and some peace of mind.

Those fees are currently being reconfigured after the 2024 National Association of Realtors settled a lawsuit that resulted in the elimination of the common structure by which realtors are compensated. Prior to 2024, the seller would negotiate the commission with their agent—typically five to six percent of the home sale cost—which would often be “baked in” to the sale price and split between both agents. Plaintiffs argued that this created “price fixing,” because buyer’s agents would steer their clients away from homes where the seller had negotiated a lower realtor fee. Today, seller agents are no longer allowed to post buyer broker fees on Multiple Listing Services, which makes for a murkier environment for new homebuyers—especially those without cash to spare. While those in support of the changes have argued that, overall, they will help reduce costs for buyers and sellers, it’s highlighting a particular pain point in the home-buying process, wherein experienced sellers (and those who own pricier homes) could be benefitting more than those entering the process for the first time.

At their core, buyer’s agents can be essential to a smoother process: One Reddit query on the subject reveals several stories from homebuyers about how their realtors helped them make sensible offers, negotiate seller concessions for repairs, and even get owners in to tour homes before they went on the market. There were plenty of responses from those who claim they are brokers, too; many who (surprisingly calmly) explained that the amount of work—managing multiple parties and communications, understanding costs of repairs and construction, rapidly responding to bidding wars, and more—is a full-time job, and most working buyers wouldn’t have a market advantage without their services.

For decades, this was generally an accepted reality and realtors would be compensated through sellers, who often pay buyer’s agent fees out of sales proceeds. After the NAR settlement, buyers must now sign a written agreement with any realtor who is part of the NAR stipulating how much the buyer will pay their agent before touring homes, according to the New York Times. This adds a whole new set of complications to an already complex process: U.S. News and World Report notes that if a seller is unwilling to compensate the buyer’s agent with their proceeds, the buyer will have to pay out of pocket for those costs. Though homebuyer behaviors will continue to shift over time as the public adjusts to the new realities of searching for the perfect agent at the right price, one realtor source told U.S. News that some buyers are foregoing representation entirely for fear that hiring the necessary help would lead to costs they couldn’t spare.

The Urban Institute predicted last year that such a scenario wouldn’t be common, and the home-buying process would likely keep to the typical “sellers pay buyer’s agent fees out of sales proceeds” process, but each individual fee structure is now up for reinvention, including charging flat fees instead of percentages.

Flat fees, says Chicago realtor Susannah Ribstein, work well for real estate companies that deal in high volumes, but she says, “it’s very difficult for agents to provide thorough one-on-one service when working with a large number of clients at once.” For first-time buyers, or those who might have less available funds to buy a home, opting for a flat-fee structure might be advantageous on paper. Similarly, brokers may opt to offer a range of á la carte services—which Ribstein says is more likely to be appealing to an entry-level buyer—like writing offers or helping with the home search only. These structures might save some money upfront, but could spell trouble down the road.

“No matter how educated they are, the consumer cannot price in advance the value of the service,” Ribstein says. “You can choose to pay an agent less money for less service, but you can’t know in advance what the dollar value of that reduced service may be. Are you totally fine with the level of service provided by this $1,000 agent, or will it result in you not finding out about something that's going to cost you $50,000 down the line?” Both flat fees and á la carte structures are not new in the industry, she says, but they could become more widespread as brokers work to navigate new uncertainties that directly affect their take-home pay.

The Urban Institute report states that the post-NAR settlement environment will likely lead to lower realtor fees, proven by The Mortgage Reports, which shows that buyer commissions have dropped from 2.51 percent in the first quarter of 2023 to 2.36 percent at the end of 2024. But they also state that it will significantly benefit sellers with more expensive homes. “More experienced buyers may need fewer brokerage services, cutting their costs. As a result, first-time homebuyers who are more likely to buy a less expensive home will realize less savings from this settlement than a repeat homebuyer, which could exacerbate the disadvantage they already face in today’s market,” reads the paper.

NPR covered the issue of flat-fee structures and featured one home purchased at $10.5 million with ShopProp, a high-volume flat-fee brokerage. The story states that the flat fee saved this buyer $247,000 by paying only a flat rate of $7,995. But perhaps that’s also the reality of possessing such wealth: One who can afford a $10.5 million home can afford to buy quickly, without regard to necessary repairs or potential opportunities for price concessions. The average home price in the U.S., after all, lands around $400,000; for an average American, it takes 12 years to save for a down payment, making the risk of buying that much greater. Most Americans, then, already strapped by high-rent burdens and rising costs of living, might also need to weigh the simple bureaucratic risks of taking the homeownership leap.

Top photo by Brandon Bell/Getty Images

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