This post provides general information and resources as a starting point and should not be construed as legal advice. Buyers and sellers should consult with their attorney, broker, and financial advisor before making decisions related to agency agreements or compensation.
Understanding Buyer Agent Compensation After the NAR Settlement
Some Background
For decades, Realtor and MLS association rules required "cooperative compensation" — meaning listing brokers were obligated to share a portion of their commission with any broker representing the buyer. For example, a seller might hire Broker X to list their home at a 6% commission. Broker X would then offer, through the MLS, a portion of that commission (often 50%) to all local Realtor members as an incentive to bring a buyer.
These "cooperative compensation" rules were eliminated in 2024 following a settlement between the National Association of Realtors (NAR) and plaintiffs in a class-action antitrust lawsuit. The core argument was that mandatory commission-sharing artificially inflated buyer-agent fees and led to uniform commission rates being published in the MLS.
Another inefficiency was that buyers were largely excluded from deciding how much their agent was paid. Many Buyer Agency Agreements simply stated that the agent would receive "the amount offered in MLS by the listing broker," leaving the actual fee determination to the listing side rather than the buyer.
How It Works Today
After the rule changes, it was widely assumed that buyers would negotiate their agent's fee directly and pay it at closing. It was also expected that this shift would reduce average buyer-agent commissions. So far, that hasn't happened — buyer-agent commissions have largely returned to pre-settlement levels.
While listing brokers can no longer advertise compensation to buyer agents through the MLS, they can still agree to pay buyer-broker fees outside the MLS. In practice, many sellers are now offering to cover the buyer-agent fee directly within the Offer to Purchase.
This isn't necessarily a bad thing. Buyers often stretch to cover down payments and closing costs, and since buyer-agent fees can be substantial, a seller who agrees to pay that fee may make their listing more competitive and increase the odds of a successful sale.
Buyer Agency Agreement and Offer to Purchase
The Wisconsin Buyer Agency Agreement authorizes the buyer's agent to seek payment of their fee from the seller and prohibits the firm from accepting compensation from any source exceeding the agreed amount. The WB-11 Residential Offer to Purchase form now includes an optional clause allowing the seller to pay the buyer-agent fee as part of the purchase contract.
What This Means for Madison Area Buyers and Sellers
Buyers should understand what they are agreeing to pay their agent before signing a Buyer Agency Agreement. Sellers should consider whether offering to cover the buyer-agent fee makes their listing more attractive.
At Madison Abodes, our buyer service fee is 2% of the final purchase price — below the typical 2.5–3% charged by most brokerages. We believe transparency and fair pricing are the foundation of a good client relationship.
Have questions? We're happy to help — contact us to discuss your plans and next steps.
