The recent settlement announced by the National Association of Realtors (NAR) creates pivotal shifts in the real estate commission structure. Aside from the damages reported in recent headlines, the settlement would prevent NAR from reestablishing rules that allow a seller’s agent to determine the compensation for a buyer’s agent, end the requirement that homes be listed on a multiple listing service (MLS) and prohibit the display of broker compensation fields on an MLS. This sets the stage for extraordinary changes across the housing market, given that NAR engagements dominate that market in the U.S. Nearly 90% of all homes sold are listed via an MLS, and American consumers pay roughly $100 billion in real estate commissions each year.

While considerable coverage of this topic has been dedicated to discussing the impacts of this change on real estate commissions, our analysis focuses on the implications and opportunities for homeowners and a diverse range of residential service providers.

In this article, L.E.K. Consulting explores the economic impact, implications, and ensuing opportunities and challenges that emerge for key stakeholders, including homeowners, homebuyers and industry players. We delve into the nuances of the settlement’s potential impact on older boomer homeowners and younger millennial and Gen Z homebuyers, identifying possible shifts in market dynamics, business models and consumer behavior.

Economic logic and market implications

We may see a generational divide for homeowners and homebuyers when it comes to pros and cons of the NAR settlement. Experienced, older homeowners stand to benefit from potential commission savings and a faster selling process. How sellers redirect the approximately $10,000 saved from potential commission reductions (based on eliminating a 2-3% commission for the U.S. average home price of $400,000) is an open question – does that money flow into other improvements in the home to enable it to sell more readily given the lower potential volume of buyer agent traffic? 

On the other side of the deal equation, as buyers become more cost-conscious, adapting to new selling practices and potentially lower selling prices could present notable challenges. First-time buyers, including millennials and Gen Z, may encounter increased upfront costs due to direct responsibility for buyers to pay agent commissions. Does this incremental upfront cost directly negatively impact spend on home improvement post-close because that added cost is coming out of cash and not able to be financed through mortgage? 

Furthermore for buyers, navigating a sellers’ market with limited inventory, particularly among resale homes, could potentially lead to self-representation, the emergence of low-cost service options, and other potential business models.

Emerging business opportunities along with consolidation

  • Technology-driven real estate listing and transaction platforms: The demand for transparent, efficient and cost-effective real estate transactions will likely increase. Tech startups offering innovative solutions for listing, searching and closing real estate transactions could disrupt traditional brokerage models.  
    • Because agents will not need to use the MLS going forward, there is room for a company like Zillow or CoStar to expand and take the place of the MLS or for another home listing database to emerge.
  • Flat-fee and a la carte brokerage services: As consumers seek more control over the services they pay for, brokerages that offer customizable service packages could gain popularity. This model allows consumers to select and pay for only the services they need, potentially lowering costs.
    • Mitigating factors do exist, however: Some states prevent consumers from accessing a la carte services and keep sellers from giving brokers low commissions to list their homes by requiring real estate agents to provide a certain level of service. Further, in 13 states plus Washington, D.C., a la carte services are not allowed, while in nine states, consumers must waive full-service representation before purchasing a la carte services.
  • Self-service and automated platforms: Platforms that facilitate self-managed transactions with automated guidance and support tools could see increased demand from buyers and sellers, particularly among younger, tech-savvy consumers.
  • Buyer turnkey project management: With so much home improvement activity tied to home sales, residential buyers may find the value-add of post-sale support quite beneficial. Envision a project manager who coordinates various fixes and enhancements (such as painting, upgrading bathrooms, or replacing flooring and appliances) and establishes a roster of service providers for the buyer.
  • New players: Some buyers may choose to hire another type of advisor (e.g., a lawyer, an appraiser) rather than a broker, depending on services and fees. This could lead to the emergence of non-broker advisors (like real estate lawyers) who seek to represent clients in the closing of a sale but not in the other aspects of buying, such as actually finding a home. Some buyers (e.g., Federal Housing Administration and Veterans Administration buyers) might choose to save costs by not having any representation.
  • New service lines: We can expect that real estate brokers may look for other forms of income to supplement any loss of brokerage income. The real estate industry has been a channel for home warranty sales, and we expect other models may emerge. Also, some loan officers may become real estate brokers, or vice versa, as a way to increase their service offerings, earning more commissions or fees.
  • Increased focus on marketing of listings: As of March 2024, homes listed received an average of 3.1 offers, but this number could fall if fewer buyers have real estate agent representation (due to potential upfront costs), which could increase the importance of (and spend on) marketing listings. There is also the potential that listing agents encourage sellers to offer concessions to attract more buyers.

Challenges for other industry players

Some industry players should be watching for unintended consequences. For example, for mortgage underwriters, the shift in commission structures and the potential for increased buyer self-representation may lead to more variability in home prices and transaction types. This could introduce complexities in property valuation and risk assessment that will require more sophisticated underwriting algorithms and risk management strategies. For the homeowners insurance industry, changes in homebuying behaviors and transaction structures may influence the types of properties being bought and sold as well as the speed of transactions. Insurers might need to adjust their assessment and pricing models to accommodate new market dynamics, including potentially higher risks associated with self-represented transactions. There is an open question as to whether the rise of these types of deals, without a set of licensed professionals included in the diligence process for a property, increases systemic risk for the underwriting and insurance ecosystem.


If approved, the NAR settlement would represent a watershed moment for the real estate industry, heralding significant changes in how real estate transactions are conducted. While the settlement presents opportunities for cost savings and market efficiencies, it also poses challenges that will require stakeholders to adapt to a rapidly evolving landscape.

For industry players, the keys to success in this new environment will be flexibility and innovation — whether through developing new business models that cater to evolving consumer preferences, leveraging technology to streamline transactions or implementing more nuanced risk assessment methods to accommodate changing market dynamics.

As the market adjusts to these changes, successful stakeholders will remain vigilant, ready to identify emerging trends and seize new opportunities. The evolution of the real estate market in response to the NAR settlement will be an important barometer of broader shifts in consumer behavior, technology’s role in traditional industries and the adaptability of established market players.

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