Rules for buying and selling a home are changing. Here's what to know.

When it comes to buying and selling homes, new rules are about to be put in play, five months after the National Association of Realtors agreed to a blockbuster settlement over how its 1.5 million agents across the U.S. are paid commissions.

The settlement — which resolved litigation stemming from a grand jury finding that the real estate group artificially inflated brokerage commissions — brings sweeping changes to the industry, starting tomorrow.

The adjustments come as prospects brighten for the beleaguered housing market. Mortgage rates earlier this month tumbled to their lowest level since April 2023, offering hope to house hunters priced out of the market given high borrowing costs and home prices that reached a record in June. 

Still, the current rate on the 30-year fixed loan stands at about 6.5%, or more than double the sub-3% rates available in 2020 and 2021. The Federal Reserve in September is widely expected to reduce its benchmark interest rate, a step that should reduce mortgage rates currently high enough to bring turnover in the housing market near 40-year lows. 

In the meantime, real estate agents across the nation will have to adopt to new changes that could potentially reduce the commission that home sellers are asked to pay. 

Many experts are now looking for home prices to fall as the sticker price will no longer include the steep commissions that have for decades been in play.

Here's a rundown of what this means for those looking to buy and sell homes going forward.

Buyers beware

Real estate agents are now required to have buyers sign a form before showing them a home. The agreements are intended to detail exactly how much a buyer will be expected to pay an agent. 

However, "at that stage, the buyer hasn't had an adequate opportunity to evaluate that agent," Steve Brobeck, a senior fellow at the Consumer Federation of America, told CBS MoneyWatch. "When you're touring houses with an agent, the agent is auditioning to be your agent, that's when you get to know the agent."

Most buyers would not be comfortable signing a contract with a financial obligation that early in the process, added Brobeck, who noted that the new requirement came at the industry's behest and was not part of the NAR's settlement.

Buyers should not sign a contract with a financial obligation until they are ready to make an offer, advises Brobeck. "There are other options for seeing a house," he noted, including calling the listing agent or attending an open house. 

Another option that is increasingly in use are touring agreements that cover limited amounts of time and come without financial ties, he said, noting that Zillow had developed one. Many model contracts developed by the industry are difficult to read, understand and are otherwise problematic for consumers, Brobeck warns. 

That said, one buyer-broker agreement developed by real estate brokerage eXp Realty is "simple, consumer-centric and meets most of our criteria," he said. "They've made it available for the industry to use."

Homebuyers should also think about offering a flat fee or paying their agent an hourly rate, the advocacy group advised.

"The dollar value of today's percentage commissions is often underestimated by buyers. Moreover, buyer agents should not have a financial incentive to be paid more the higher the sale price," Brobeck said in a report.

Sellers rejoice?

For folks selling their homes, the changing landscape should bring some quick respite, as their agents no longer have to make an offer of commission to buyers' agents. 

Nearly 9 in 10 home sales are handled by real estate agents affiliated with the NAR, the nation's biggest trade association. It required that home sellers figure in a commission rate, usually 6%, before listing homes on its property database, known as the Multiple Listing Service, or MLS.

The commission borne by home sellers was then divided between agents for the seller and buyer. While on paper subject to negotiation, the fee was the focal point of the lawsuit lost by the NAR and brought by a group of home sellers, who claimed the trade group and others colluded in driving up the commissions.

In June, the median sale price of a home was $442,451, according to Redfin. Under the previous practices sellers would be paying $26,547 in commissions. That customary rate is no longer the default.

Sellers can now expect to be asked for just one side of the commission pot, or what would now average 2.5% to 3%. 

"For the first time now, buyers will have the opportunity to negotiate the buyer commission," said the CFA's Brobeck. "We suggest setting a target of 2% or less," the advocate said. Matched with the buyer agent's commission that would mean paying overall commission closer to 4% rather than the current standard of 5% to 6%, he added.

In a separate but related development, almost any American who sold a home in the last fives years is covered by the class-action settlement with NAR and other brokerages. How much anyone is entitled to depends in part on how many sellers submit claims, and other factors including where one lives and when your home was listed. 

To see if you're eligible, check here.