How listing agreements work, after the 2024 NAR settlement

The listing agreement is the contract a seller signs with a real estate brokerage to market and sell their home. It governs what the agent will do, how long they have to do it, and how they'll be paid. For decades, the listing agreement also determined how much would be paid to the buyer's agent, bundled in a single agreement that listed the total commission and how it would be split. The 2024 NAR settlement changed that.1 The post-settlement landscape requires explicit, separate negotiations on each side, and the listing agreement is now narrower in scope than it used to be.

This is the most material change in residential brokerage in decades, and most sellers entering the market in 2024 and after will encounter the new structure for the first time.

What's in a listing agreement

The standard listing agreement covers a few categories.

Scope of representation. The brokerage's role and the listing agent's authority. Most listing agreements are exclusive right to sell, the seller agrees that the brokerage gets the commission no matter who finds the buyer, even if the seller finds the buyer themselves. Less common variants include exclusive agency (commission only if the brokerage produces the buyer) and open listings (no exclusivity, multiple brokerages can compete). Exclusive right to sell is by far the most common structure for residential listings.

Term. The duration of the agreement, typically 3–6 months. After the term expires, the seller can renew, switch agents, or take the home off the market. Most agreements have automatic-renewal provisions; sellers should check whether the agreement renews unless terminated, or expires unless extended.

Compensation. What the brokerage will be paid. Commission percentages vary, with 5–6% of sale price historically being typical (split between listing and buyer's agent). Post-settlement, some sellers are negotiating lower listing-side compensation as a separate line, decoupled from any buyer-side amount. Flat fees and reduced-service options exist for sellers who want to handle some of the work themselves.

What's covered by the listing agent. Marketing (MLS listing, photos, signage, advertising), open houses, showings coordination, offer review and negotiation, contract management through close. The specific deliverables vary by brokerage and by negotiation.

Exclusivity period after termination. Most listing agreements include a "carryover" clause, if a buyer the listing agent introduced eventually buys the home (within 60–180 days of the agreement ending), the listing agent still gets compensated. This protects the brokerage from sellers who tour the home with the agent's clients then drop the agent to avoid commission.

What changed with the NAR settlement

The settlement, which took effect in August 2024, changed three things specifically.1

First, buyer-agent commission can no longer be advertised in the MLS. For decades, the listing agent would specify the buyer-side commission in the MLS listing, and buyer's agents could see it before showing the property. Post-settlement, this information has been removed from MLS systems, and buyer's agents now have to inquire through other channels (often the listing agent directly).

Second, buyer-broker agreements are now required before showings. Buyer's agents have to sign a written agreement with their buyer specifying how they'll be compensated before they can show MLS-listed properties. The agreement specifies the source of compensation, seller-paid (when offered), buyer-paid, or split.

Third, buyer-side commission is now negotiable as a separate transaction. Sellers can still offer buyer-side compensation as part of their listing strategy (and most still do, because doing so widens the buyer pool), but it's a separate negotiation from the listing agreement, and it can take various forms, a fixed percentage, a flat dollar amount, or "as offered in writing" leaving room for case-by-case negotiation.

The practical effect for sellers is more flexibility and more decisions. The seller now has to decide whether to offer buyer-side compensation, how much, and how to communicate that to the buyer's side. The listing agent advises on this, but the decision is the seller's.

Listing-side compensation negotiation

The listing agent's compensation is now a clean negotiation between seller and listing brokerage. Common structures include:

Percentage-based (typically 2–3% of sale price for the listing side post-settlement, lower than the historical 2.5–3% pre-settlement). The percentage scales with the sale price.

Flat fee (a fixed dollar amount regardless of sale price). Some brokerages offer reduced-service flat-fee listings ($1,000–$5,000 typically) where the seller takes on some of the work.

Hybrid (a flat fee plus a smaller percentage, or a percentage with a cap). These are negotiable and varied.

For most sellers, percentage-based listing compensation is still the standard, with 2.5% as a common midpoint. Lower-cost options exist for sellers willing to handle more of the process themselves.

Buyer-side compensation strategy

The trickier decision is whether and how much to offer buyer-side compensation. Three main strategies have emerged post-settlement:

Offer at typical market rate (2.5–3% in most markets). This signals to buyer's agents that the property is open to all buyers and is consistent with what buyers' agents have historically been compensated. The downside is it locks in the cost from the seller's side regardless of who shows up.

Offer a lower amount (e.g., 2.0%). This reduces seller cost but may discourage some buyer's agents from prioritizing the property. In markets where buyer's-agent compensation has been competitive, this can narrow the buyer pool.

Offer nothing, let buyers' offers handle it. Some sellers don't offer any buyer-side compensation upfront and let the buyer's offer specify how they want to handle their agent's compensation. This is most viable in seller's markets where buyer demand is strong; in other markets, it can suppress offers.

The honest answer is that the right strategy depends on the local market and how buyer-side compensation has shaken out post-settlement. Some markets have largely retained the pre-settlement structure (sellers still offering 2.5–3%); others have shifted toward more variation. The listing agent's market read informs the decision.

A note on dual agency

When a listing agent ends up representing both the seller and the buyer (the buyer comes through their open house, calls the listing agent directly), the resulting situation is dual agency. State rules vary on whether dual agency is allowed and what disclosures it requires. Some states prohibit it entirely; others allow it with explicit written consent from both parties.

The conflict-of-interest concern is structural, the same agent can't fully represent the seller's interest in maximizing price while also fully representing the buyer's interest in minimizing it. Dual agency typically converts to "transaction broker" or "facilitator" status, where the agent is neutral rather than fiduciary to either side. Sellers entering this situation should understand what their agent's actual fiduciary obligations become.

A reasonable frame

The listing agreement decides who's working for the seller, for how long, and for how much. The 2024 NAR settlement decoupled buyer-side compensation from the listing agreement, making it a separate negotiation that the seller has more control over but also more responsibility for. The right approach is to interview multiple listing agents, compare their proposed structures and market approaches, and sign with someone whose strategy matches the seller's situation. The listing agreement should be read carefully before signing, the same way any other professional-services contract would be.