By Eric Berman, REALTOR® | The Eric Berman Team at Compass
 

TL;DR:

The NAR settlement, effective August 17, 2024, changed how buyer's agent compensation gets negotiated on Long Island — not what commissions actually are. Two rule changes matter for sellers: buyer's agent compensation can no longer be advertised on MLS (it's negotiated separately), and buyer-broker written agreements are required before showings. Total commission on Long Island still runs 5-6% typically, with the listing commission and buyer's agent compensation now negotiated as separate decisions rather than as a single figure. Sellers face three paths on buyer's agent compensation: offering standard 2-2.5% via listing agreement (maintains full buyer pool access), offering nothing and letting buyer negotiate directly (narrows buyer pool substantially), or hybrid approaches. Post-settlement, fee-negotiated listing commissions of 1.5-2% are increasingly available on higher-value Long Island properties, producing $20,000-$50,000+ savings. Sub-market matters — Nassau County North Shore luxury properties often support fee-negotiated listing commissions; Mid/South Nassau and Manorhaven-type entry-level properties benefit from standard buyer's agent compensation to maintain buyer pool. NY-specific framework applies alongside: PCDS March 20 2024 mandatory 56-question form, NY attorney state coordination 1-2 weeks before listing, contract-to-closing typically 45-60 days.

The NAR Settlement in Plain Terms

In mid-March 2024, the National Association of Realtors settled a class-action lawsuit brought by home sellers who argued that NAR policies unfairly inflated commission rates. The settlement, valued at $418 million over four years pending court approval, doesn't admit wrongdoing but implements specific rule changes that took effect August 17, 2024.

Two things matter for Long Island sellers. First, buyer's agent compensation can no longer be advertised on the Multiple Listing Service (MLS). The field that used to display what a listing brokerage offered to the buyer's brokerage — the take-it-or-leave-it figure — is gone. Second, buyers are now required to sign written agreements with their buyer's agents before touring properties, spelling out what the buyer's agent will be paid and by whom.

Everything else is largely the same. Commissions were never legally set — they've always been negotiable. Sellers have always had the right to negotiate listing commission before signing a listing agreement. What the settlement changed is the mechanics of how buyer's agent compensation gets communicated and structured.

For substantive framework covering all Long Island seller closing costs including the interaction between commission structure and other costs, the Long Island closing costs guide walks through the full framework.

What the Settlement Did Not Change

Some of the news coverage suggested more dramatic change than actually occurred. Three things did not change.

Commissions still exist. Real estate agents on both sides of a Long Island transaction still get paid. The total commission on Long Island typically still runs 5-6% of the sale price on standard residential transactions. Higher-value properties increasingly support lower total commission structures, and fee-negotiated listing commissions are more available than they were pre-settlement, but the concept of paying agents for their work on a percentage basis hasn't changed.

Sellers still can offer buyer's agent compensation. The settlement doesn't prohibit sellers from paying the buyer's agent. It simply means the offer can't be advertised on MLS. Sellers who want to offer buyer's agent compensation to maintain full buyer pool access still can, and most Long Island sellers currently choose this path for reasons discussed below.

Commissions were never "set." One of the underlying tensions in the lawsuit was the argument that MLS commission fields effectively standardized commission rates across markets. Legally, this was never how it worked — commissions have always been negotiable between agents and their clients. The settlement clarifies the mechanics of negotiation but doesn't create a "new" negotiability that didn't exist before.

How This Actually Plays Out on Long Island in Practice

More than two years into the new framework, patterns are clear. Most Long Island sellers still offer buyer's agent compensation, typically at standard 2-2.5% rates. Real Brokerage survey data covering the months following the August 17, 2024 effective date showed 63% of agents reporting home sellers often covering buyer-broker commissions, 21% indicating sellers occasionally cover these costs.

The negotiation now happens in a different place. Instead of the buyer's agent compensation being an MLS field the seller's listing agent set and the buyer's agent accepted, it's typically negotiated within the offer terms or listing agreement structure. Some listing brokerages still coordinate buyer's agent compensation offers through direct broker-to-broker communication. Some sellers offer it via a specific dollar amount rather than a percentage.

Fee-negotiated listing commissions are more available on higher-value Long Island properties than they were pre-settlement. The old 6% total commission structure that was common on standard Nassau County North Shore residential is now more frequently 5% or lower on properties above $1.5M, with fee-negotiated arrangements producing meaningful savings.

The Three Buyer's Agent Compensation Paths Sellers Face

Long Island sellers now face a strategic decision on buyer's agent compensation that they didn't have to consciously make before August 17, 2024.

Path 1: Offering standard 2-2.5% via listing agreement. This maintains full buyer pool access. Buyer's agents know the compensation is offered before touring, buyers know the compensation is being handled by the seller rather than requiring cash out of pocket, and the offer negotiation stays focused on price and terms rather than commission mechanics. This is the most common Long Island choice.

Path 2: Offering nothing and letting the buyer negotiate directly. This shifts the buyer's agent compensation entirely to the buyer or to the offer negotiation. In practice, this narrows the buyer pool substantially — many buyer's agents will not show properties where compensation isn't offered upfront, and many buyers cannot afford to pay their agent's compensation out of pocket on top of the down payment, closing costs, and moving expenses. Some Long Island sellers pursue this path anyway, typically on distinctive properties or in circumstances where a smaller focused buyer pool is acceptable.

Path 3: Hybrid approaches. Offering a lower buyer's agent compensation than standard (1.5% or 2%) with negotiation flexibility, or offering compensation only if presented in the offer terms, or offering a specific dollar amount. Hybrid approaches produce mixed outcomes — they can work well when paired with substantial listing agent coordination but often produce buyer's agent resistance and slower response times.

The strategic decision matters. Sub-market and property characteristics shape which path fits.

The Strategic Decision Framework

Deciding among the three paths comes down to specific property characteristics, sub-market dynamics, and seller circumstances.

Buyer pool sensitivity matters most. Properties with broad buyer pool interest — well-priced Nassau County entry-level, well-maintained Mid/South Nassau residential, most Northeast Queens residential — benefit substantially from standard buyer's agent compensation to maintain the full pool. Restricting the pool by offering less produces meaningfully worse outcomes than the compensation savings justify.

Distinctive properties with focused buyer pools can support Path 2 or hybrid approaches. Luxury waterfront properties targeting cash buyers, character homes with narrow buyer appeal, and unique architectural properties often have buyers who work directly with listing agents or without buyer's agent representation. In those cases, the buyer pool restriction is less costly.

First-time buyer affordability considerations matter substantially on entry-level properties. First-time buyers stretching into purchases typically cannot cover buyer's agent compensation out of pocket on top of down payment, closing costs, and moving expenses. Properties targeting first-time buyer pools (entry-level Long Island in the $600K-$900K range in Levittown, parts of Bayside, Lynbrook, Mineola, New Hyde Park) benefit from standard buyer's agent compensation to maintain first-time buyer pool access.

Higher-value properties often support hybrid approaches. Properties above $2M with sophisticated buyer pools sometimes benefit from lower buyer's agent compensation (1.5-2%) paired with strong listing agent coordination. The buyer pool at higher price points typically has more flexibility on structuring compensation.

Post-Settlement Listing Commission Negotiability

The NAR settlement created new visibility into listing commission negotiability that many Long Island sellers hadn't previously realized existed.

Standard Long Island listing commissions historically ran 2.5-3% for the listing side of a 5-6% total commission structure. Post-settlement, fee-negotiated listing commissions of 1.5-2% are increasingly available on higher-value properties. On a $2M Long Island property, moving from a 3% listing commission to a 2% listing commission produces $20,000 in savings. On a $4M property, the same shift produces $40,000. On a $5M+ property, $50,000+ in savings is achievable.

The trade-off matters. Fee-negotiated listing commissions typically come with substantive services — professional photography, video, marketing coordination, showing coordination, offer negotiation, contract-to-closing coordination. But service scope can vary meaningfully by brokerage and listing agent. Substantive comparison of what specific listing agents actually deliver at what fee level matters more than the fee alone.

For Long Island sellers weighing this decision, the honest framework: the listing agent conversation about fee structure is now more available than the old framework suggested, and the potential savings on higher-value properties often exceed the total budget for pre-listing preparation, staging, and repair coordination. Sellers who don't have this conversation are often leaving meaningful money on the table.

What Listing Agents Are Doing Differently

Substantive listing agent coordination changed in specific ways since August 17, 2024.

Buyer-broker written agreement coordination. Before any property tour, buyer's agents must have a written agreement with their buyer specifying compensation. Listing agents often coordinate with buyer's agents on the compensation structure before showings, which sometimes involves conversations about how buyer's agent compensation will be handled given the seller's chosen path.

Offer structure changes. Offers now regularly include specific language about buyer's agent compensation — how much, from whom, and structured how. Contract review requires attention to compensation mechanics that weren't part of pre-settlement contracts.

Negotiation timing shifts. Instead of buyer's agent compensation being handled at MLS listing time and buyers seeing "sellers are offering X%" upfront, buyer's agents now often clarify compensation with the listing agent before writing an offer, adding a step to the buyer-side timeline that sometimes matters for competitive Nassau County North Shore properties.

Post-Sitzer/Burnett contract language. NY real estate attorney coordination has adapted to include specific language covering the post-settlement framework in listing agreements, offer contracts, and closing documents. Working with a NY real estate attorney familiar with the post-August 17, 2024 framework matters more than in the pre-settlement era.

Long Island Sub-Market Considerations

Post-settlement dynamics vary substantially by sub-market.

Nassau County North Shore luxury (Port Washington, Manhasset, Roslyn, Great Neck, Plandome, Sands Point, Old Westbury) — fee-negotiated listing commissions of 1.5-2% frequently available on higher-value properties. Sophisticated buyer pool often accommodates hybrid buyer's agent compensation approaches. Substantial savings potential on properties above $2M.

Nassau County Mid/South Nassau (Garden City, Levittown, Lynbrook, Mineola, New Hyde Park) — standard listing commissions still typical. Standard buyer's agent compensation important for maintaining buyer pool. First-time buyer affordability considerations meaningful for entry-level properties.

Northeast Queens (Bayside, Fresh Meadows, Jamaica Estates, Douglaston, Little Neck, Whitestone) — NYC framework with buyer pool composition varying by neighborhood. Standard commission structures still common. Buyer pool sensitivity to compensation offer varies by specific neighborhood.

Entry-level Long Island ($600K-$900K) — standard buyer's agent compensation important for maintaining first-time buyer pool access. Fee-negotiated listing commissions less commonly appropriate given the size of the sale.

Luxury waterfront ($3M+) — significant flexibility on both listing commission structure and buyer's agent compensation approach. Cash buyer segment less sensitive to buyer's agent compensation mechanics.

PCDS March 20, 2024 Framework Applies Alongside

The NAR settlement framework operates alongside — not instead of — the NY Property Condition Disclosure Statement (PCDS) requirements that took effect March 20, 2024.

PCDS is mandatory for all NY residential sales as a 56-question form covering property condition, environmental factors, and seven flood-related questions per the 2024 amendment. The old $500 credit alternative is gone.

For Long Island sellers, the two frameworks affect different components of the transaction: PCDS affects disclosure and inspection dynamics; NAR settlement affects commission structure and buyer's agent compensation mechanics. Both apply to every Long Island residential sale.

Substantive NY attorney coordination through both frameworks typically 1-2 weeks before listing. NY attorney fees typically $1,500 to $3,500+ for standard Long Island residential coordination covering PCDS completion, listing agreement review, contract preparation, and post-Sitzer/Burnett compliance.

For substantive framework covering PCDS and other NY paperwork requirements in detail, the Long Island paperwork guide walks through the framework in full.

Common Long Island Seller Mistakes Since August 17, 2024

Some patterns consistently produce worse outcomes than sellers expect.

Not thinking through the buyer's agent compensation decision. Sellers who default to whatever the listing agent suggests without understanding the three paths often make suboptimal decisions for their specific property and sub-market. The decision matters and warrants substantive conversation.

Over-negotiating listing commission at expense of exposure. Fee-negotiated 1.5-2% listing commissions are increasingly available, but service scope can vary meaningfully. Skimping on listing agent coordination to save 0.5-1% on commission sometimes produces meaningfully worse outcomes on the sale price than the commission savings justify.

Misunderstanding the interaction between listing commission and buyer's agent compensation. Some sellers assume they save money by reducing buyer's agent compensation. In reality, buyer pool restriction often costs meaningfully more than the compensation savings.

Assuming the settlement made commissions "cheaper." The settlement created more visibility and negotiability, but the underlying work agents do hasn't changed. Long Island sellers who assume commissions dropped substantially post-settlement are often disappointed to discover the changes are mechanical rather than pricing-related.

Not coordinating substantive NY attorney review of post-settlement contract language. Contracts now include specific language covering buyer's agent compensation mechanics that require attorney review. Sellers who skip attorney engagement or use attorneys unfamiliar with post-August 17, 2024 framework create legal exposure.

Not understanding how buyer-broker written agreements interact with showings. Some sellers assume buyer-broker agreements are the buyer's problem. In practice, agreement structure affects buyer pool access and showing coordination. Substantive listing agent coordination matters.

A Recent Long Island Post-Settlement Story

A Nassau County North Shore homeowner walked through this decision framework recently on his colonial worth approximately $2,450,000. He'd received specific listing pitches ranging from 3% listing commission with 2.5% buyer's agent compensation offered (6% total structure) to 1.75% listing commission with 2% buyer's agent compensation offered (4.75% total structure), plus intermediate variations.

The evaluation: 6% total commission on $2,450,000 = $147,000. 4.75% total = $116,375. The 1.25% differential = $30,625.

He chose the 1.75% listing commission at 2% buyer's agent compensation path with a specific listing agent whose photography, video, marketing coordination, and negotiation approach met his substantive expectations. Substantive listing agent coordination through PCDS March 20 2024 mandatory 56-question form completion. NY attorney engaged 12 days before listing with post-Sitzer/Burnett framework contract language coordination.

Public MLS launched Thursday morning. First-weekend open house drew 18 showings across Saturday and Sunday. Four offers arrived within 10 days ranging $2,385,000-$2,510,000. Contract signed at $2,498,000 on day 11.

Contract-to-closing ran 55 days. Inspection day 12 with $3,500 credit for minor items. Appraisal day 20 at $2,505,000 above contract. Closing at day 66 total.

Net proceeds calculation: $2,498,000 sale minus $1,247,300 mortgage payoff minus $118,655 selling costs (4.75%) minus $2,340 property tax proration plus $6,570 escrow refund = $1,136,275.

Comparable outcome under the old 6% total commission structure would have produced $149,880 in selling costs — an additional $31,225 versus the fee-negotiated structure. That's roughly the total budget for substantive pre-listing preparation, staging coordination, and Long Island attorney fees combined.

His situation illustrates how the post-Sitzer/Burnett framework produces meaningful savings on higher-value Long Island properties when sellers substantively engage with the fee structure decision.

Where to Start

For Long Island sellers thinking through the NAR settlement framework, the honest starting point is understanding both the commission structure decision and the buyer's agent compensation decision as separate strategic choices.

First: honest property and sub-market assessment. What's the specific property worth and what does the specific sub-market buyer pool look like? The home valuation tool is a quiet way to begin.

Second: listing agent conversations with substantive comparison of what specific agents deliver at what fee level. Fee-negotiated listing commissions of 1.5-2% are available on higher-value properties but service scope varies meaningfully.

Third: buyer's agent compensation strategic decision. Standard 2-2.5% maintains buyer pool access for most Long Island properties. Path 2 (nothing offered) narrows the pool substantially. Hybrid approaches produce mixed outcomes.

Fourth: NY attorney engagement 1-2 weeks before listing. PCDS March 20 2024 mandatory coordination applies. Post-Sitzer/Burnett framework contract language coordination matters.

Fifth: substantive sub-market comp analysis showing current post-settlement outcomes on similar properties. Patterns are clearer than they were in the first months post-settlement.

Sixth: substantive listing agent coordination throughout. Post-settlement mechanics affect the process even when the commission structure decision is made.

For related context: the Long Island closing costs guide covers the interaction between commission structure and other selling costs. The Nassau County vs. Suffolk County buyer's guide covers the framework from the buyer perspective. The pre-listing preparation pillar covers the broader preparation framework. The Long Island paperwork guide covers PCDS March 20 2024 and other NY paperwork requirements. The six highest-ROI home improvements post covers preparation ROI.

The honest bottom line: the NAR settlement changed how buyer's agent compensation gets negotiated on Long Island — not what commissions actually are. Two rule changes matter (buyer's agent compensation off MLS, buyer-broker written agreements before showings) but total commission on Long Island still runs 5-6% typically. Fee-negotiated listing commissions of 1.5-2% are increasingly available on higher-value properties, producing $20,000-$50,000+ savings often more than pre-listing preparation budget. Three buyer's agent compensation paths exist — standard 2-2.5% (maintains buyer pool), nothing offered (narrows pool substantially), hybrid approaches (mixed outcomes). Sub-market matters — Nassau County North Shore luxury supports fee-negotiated approaches, Mid/South Nassau and Northeast Queens benefit from standard compensation to maintain buyer pool. NY-specific framework applies alongside: PCDS March 20 2024 mandatory 56-question form, NY attorney state coordination 1-2 weeks before listing, contract-to-closing 45-60 days.

Note: This blog post covers general framework. Individual property circumstances and market conditions vary. Consult qualified real estate professional with substantive Long Island sub-market expertise, real estate attorney familiar with post-August 17 2024 framework, and financial advisor for advice specific to your situation.

FAQs

How does the NAR settlement impact home sellers on Long Island?

The NAR settlement, effective August 17, 2024, changed how buyer's agent compensation gets negotiated on Long Island — not what commissions actually are. Two rule changes matter: buyer's agent compensation can no longer be advertised on MLS (it's negotiated separately), and buyer-broker written agreements are required before showings. Total commission on Long Island still runs 5-6% typically. Sellers now face three paths on buyer's agent compensation: offering standard 2-2.5% via listing agreement (maintains full buyer pool access — most common Long Island choice), offering nothing and letting buyer negotiate directly (narrows buyer pool substantially), or hybrid approaches (mixed outcomes). Fee-negotiated listing commissions of 1.5-2% are increasingly available on higher-value properties, producing $20,000-$50,000+ savings.

Do I still have to pay the buyer's agent?

No, but most Long Island sellers still choose to. The settlement doesn't require sellers to pay buyer's agent compensation — it just changes how the offer is communicated. Real Brokerage survey data covering the months following August 17, 2024 showed 63% of agents reporting home sellers often covering buyer-broker commissions. Most Long Island sellers offer standard 2-2.5% buyer's agent compensation because it maintains full buyer pool access. Not offering compensation typically narrows the buyer pool substantially — many buyer's agents will not show properties where compensation isn't offered upfront, and many buyers cannot afford to pay their agent's compensation out of pocket. The strategic decision depends on property characteristics and sub-market — distinctive properties with focused buyer pools sometimes support Path 2 (nothing offered) or hybrid approaches.

Are commissions cheaper post-settlement on Long Island?

Mechanically negotiable rather than dramatically cheaper. Commissions were never legally "set" — they've always been negotiable. What the settlement created is more visibility into negotiability. Fee-negotiated listing commissions of 1.5-2% are increasingly available on higher-value Long Island properties (2M+), where they weren't as commonly offered pre-settlement. On a $2M property, moving from 3% listing commission to 2% produces $20,000 in savings. On a $4M property, $40,000. On a $5M+ property, $50,000+ in savings is achievable. However, service scope varies meaningfully by fee level — skimping on listing agent coordination to save 0.5-1% on commission sometimes produces meaningfully worse outcomes on sale price than commission savings justify. Substantive comparison of what specific listing agents actually deliver at what fee level matters more than the fee alone.

How does the buyer-broker written agreement affect me as a seller?

Buyers are now required to sign written agreements with their buyer's agents before touring properties. This affects sellers indirectly through buyer pool access and showing coordination. Listing agents often coordinate with buyer's agents on compensation structure before showings, which sometimes involves conversations about how buyer's agent compensation will be handled given the seller's chosen path. Substantive listing agent coordination matters. Some sellers assume buyer-broker agreements are the buyer's problem — in practice, agreement structure affects showing coordination and buyer pool access for the seller's property. Offers now regularly include specific language about buyer's agent compensation (how much, from whom, structured how) that requires NY attorney review.

Does the NAR settlement change PCDS or NY attorney requirements?

No. The NAR settlement framework operates alongside — not instead of — the NY Property Condition Disclosure Statement (PCDS) requirements that took effect March 20, 2024. PCDS is mandatory for all NY residential sales as a 56-question form covering property condition, environmental factors, and seven flood-related questions per the 2024 amendment (no $500 credit alternative). Both frameworks apply to every Long Island residential sale. Substantive NY attorney coordination through both frameworks typically 1-2 weeks before listing — NY attorney fees typically $1,500 to $3,500+ for standard Long Island residential covering PCDS completion, listing agreement review, contract preparation, and post-August 17 2024 compliance. Contract-to-closing typically runs 45-60 days in NY regardless of commission structure.

By Eric Berman, REALTOR® | The Eric Berman Team at Compass

Eric Berman | Long Island & Queens Associate Broker | Compass
1468 Northern Blvd, Manhasset, NY 11030
(917) 225-8596 | eric@ericbermanre.com | theericbermanteam.com