Buyers are now responsible for their real estate broker’s commission: what this means for buyers and sellers

October 12, 2025

By Nadia Cabrera-Mazzeo, Esq.

If it wasn’t news enough that real estate brokers in NM are generally not agents with a fiduciary duty toward their clients, it may be even more shocking for buyers to hear that as of 2024, they are on the hook for their broker’s commission. Read on to learn when this happened, why you
probably didn’t know about it, and what your options are as a buyer or seller.

How We Got Here: The NAR Settlement

The National Association of Realtors (NAR) is a powerhouse trade organization that oversees an enormous membership of real estate professionals (called “realtors”) and wields incredible influence in the real estate industry. Since its founding in 1913, the NAR has unilaterally set the standard commission rates earned by real estate brokers. Real estate commissions in the U.S. are among the highest in the world and, until now, were almost always paid by sellers.

In separate class action lawsuits, groups of sellers sued the NAR and some corporate brokerages saying that the way they set commissions illegally prevented price negotiation and competition and forced sellers to pay inflated rates. In 2024, the NAR settled the lawsuits, paying out $418 million and agreeing to make changes to its practices. One of those changes requires real estate professionals to make it clear that commissions are negotiable. While sellers are still encouraged to pay the buyer broker’s commission, it is no longer mandatory. In cases where the seller opts not to pay the buyer’s broker, the buyer is responsible for their broker’s commission.

What Has Really Changed

The 2024 NAR Settlement resulted in monumental changes to the real estate industry, but data shows that commissions have remained largely unchanged and, for now, most sellers are still paying the buyer broker’s commission. The real changes have been snuck into the contracts. The NM Association of Realtors (NMAR)’s commonly-used purchase agreement makes it clear to those that actually read it that commissions are negotiable and still contains default language that the seller will pay the buyer’s broker. The NMAR’s buyer-broker agreement now states in bold letters that the broker’s commission was freely negotiated by the buyer and that the buyer will be responsible for that commission if the seller declines to cover it.

The fact that people generally do not read contracts is backed by data and is not news. As someone who has helped folks understand their real estate contracts, I know first-hand that people tend to skip those too. I do not believe that real estate professionals have tried to pull one over on the public by letting these big industry changes go unnoticed. But I do believe that the public’s ignorance of these changes is part of the reason why brokers’ practices and commissions have not been affected. Indeed, these industry changes have the potential to completely reshape buyer-side real estate services.

Options for Sellers

For one, sellers can and should shop around for a broker who is a good fit in terms of experience, service expectations, and commission rate. For example, if a seller wants a broker who will act as their agent with a legal duty to act in the seller’s best interest, the seller should request this service and hold out until they find a broker willing to take on the role of agent. The broker’s role as agent or not could factor into negotiations over commission. Sellers may still find it in their best interest to offer compensation to a buyer’s broker but they have the option not to. Sellers should discuss the pros and cons of each approach with their broker and make an informed decision.

Options for Buyers

Like sellers, buyers can and should shop around for a broker who is a good fit. While I believe a true agency relationship is the best option for most buyers and sellers, it is even more necessary for buyers who may have to pay out of pocket for their broker’s services. There is now no guarantee that a seller will pay the buyer’s broker, so buyers must negotiate a payment amount at the outset with their broker that they will be willing and able to pay if the seller does not offer to do so. Right now, it is highly unlikely for lenders to cover a broker’s fee along with the mortgage. If the standard commission (about 2.5% in NM for each broker) is not feasible for a buyer who is pouring all their money into the down payment and closing costs, buyers should look for brokers willing to offer limited or flat-fee services.

When Can a Real Estate Attorney Help?

For buyers and sellers who have brokers representing their interests, an attorney can offer clarity and peace of mind when it comes to understanding a party’s rights and obligations under the contracts and ensuring that a non-fiduciary broker truly is acting in the client’s best interest. Lawyers always have a fiduciary duty to their clients and their payment is not contingent on the sale.

For buyers and sellers looking to forego brokers and do it themselves, hiring an attorney becomes more of a necessity to ensure the transaction is fair and properly executed. A well-written purchase agreement that takes the parties’ needs into account and covers the legal requirements of a purchase is critical for a real estate transaction, especially between strangers. The common NMAR purchase agreement and other NMAR contracts are proprietary forms that only realtors are allowed to use. So if there is no realtor involved, the parties will need to come up with their own purchase agreement.

Law office of Nadia Cabrera-Mazzeo, Esq.

Small business and contracts lawyer

Based in Taos, serving clients throughout New Mexico

505 427 2025

nadia@honestcontracts.com

The information on this website is not legal advice and does not create an attorney-client relationship. The rates and fees listed on this website may not be the most up to date.