Alabama Act 2025-59: What It Means for Buyers, Sellers, and Agents

Homebuyers, sellers, and real estate professionals in Alabama are adjusting to a new legislative update that reshapes how and when consumers partner with agents in property transactions. Responding to concerns over the recent National Association of Realtors settlement requirement for buyer agreements before home tours, the law fine‑tunes agreement timing and strengthens disclosure obligations to provide clearer guidance on brokerage services and compensation. As the first state to enact these reforms, Alabama’s approach underscores a balance between consumer choice and professional transparency.

The NAR Settlement & Why Alabama Pushed Back

So, let’s start with why this change is happening. The 2024 $418 million NAR settlement introduced a rule requiring written agreements with buyers before they could even tour a property. That raised major concerns about limiting consumer choice and potential antitrust issues. While Alabama and its real estate professionals weren’t part of that lawsuit, the rules still impacted transactions statewide, requiring all buyers to sign a buyer’s agreement before viewing a home.

In many cases, it makes sense to interview and hire an agent before viewing homes. However, making it a legal requirement for every buyer and every situation didn’t make sense—especially when meeting an agent for the first time at a property.

To address these concerns, the Alabama Association of Realtors (AAR) pushed for a legislative fix during the 2025 Regular Legislative Session. Thanks to your engagement, we were successful! Earlier this week, Governor Kay Ivey signed Alabama Act 2025-59 into law, and it officially goes into effect on April 18, 2025.

Alabama is the first state and the trailblazer in correcting this flawed policy. I expect other states to follow our lead.

What Alabama Act 2025-59 Means for Buyers, Sellers, and Agents

Now, what does this mean for homebuyers, sellers, and real estate agents? Here are the key takeaways:

1. More Transparency for Buyers – Buyers will now receive clear information upfront about brokerage services and compensation when they first interact with a real estate licensee.
2. RECAD Disclosures Still Required – The new law reinforces Alabama’s RECAD framework. Before a buyer tours a property, they must receive a Brokerage Services Disclosure Form and a copy of the agency’s Disclosure Office Policy.
3. Compensation Disclosure – Every agency’s Disclosure Office Policy must clearly explain how agents are compensated, ensuring buyers and sellers fully understand the process. In most cases, buyers are still including a provision in their offers requesting the seller to cover their buyer agent compensation.
4. No Premature Binding Contracts for Buyers – Unlike the NAR settlement’s original requirement, Alabama buyers will not be forced to sign a binding contract just to view a home. Instead, a written agreement between the agent and consumer is required at key points: For buyers: Before submitting an offer. For sellers: Before listing a property.
5. Terms of Compensation in Agreements – Brokerage agreements must now clearly outline compensation terms to ensure transparency for all parties.

If you have questions, we offer a free buyer and first-time homebuyer counseling session. We’ve pinned a comment with a link to schedule your free buying consultation.

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