It’s been just over a week since the start of new rules dictating how residential real estate agents get paid. The industry is already feeling the effects.

While brokers are optimistic that the changes will be a net positive for them and their clients, it's been an adjustment period as agents learn how to work under the new regulations.

“It’s literally organized chaos,” John Russell, broker and co-founder of Mainframe Real Estate in Orlando, Florida, told CoStar News.

The new regulations are the result of an agreement reached in March after home sellers filed class-action lawsuits against the National Association of Realtors trade group. Under the new system, listing agents can no longer advertise compensation for a buyer’s broker on the multiple listing service, the online platform where agents share their houses for sale, and buyer brokers must have a signed agreement before they can work with a homebuyer.

Under the now-defunct, decade-old rules, listing agents could offer and advertise compensation for buyer brokers on the MLS. It’s a strategy that was used to incentivize buyer agents to bring clients to see properties, and it resulted in sellers typically paying fees to both their agent and the buyer's agent — splitting a 5% or 6% commission, for example.

The NAR argues that "the settlement empowers consumers with choice when it comes to services, compensation, and marketing strategies that meet their needs."

Kevin Sears, president of the industry group, said in a statement to CoStar News that "NAR members are dedicated, intelligent, and highly adaptable experts in their fields — that’s why Realtors are such an integral part of the homebuying and selling process. These changes help to further empower consumers with clarity and choice when buying and selling a home. ... I am confident in our members’ abilities to prepare for and embrace this evolution of our industry and help to guide consumers in the new landscape."

The transition to the new system has been far from smooth, and though many brokers feel good about the future, it’s going to be a few months before things are more normal.

The new rules don’t stop listing agents and sellers from offering commissions to the buyer’s agent. They just change how those commissions can be offered. Now, rather than putting offers of compensation on the MLS, listing agents and buyer agents have to directly communicate any offers of compensation.

So far, that communication has meant a lot more phone calls, emails and texts than usual. That’s been “a nuisance,” according to Natasha Simon, an agent in Houston, who said she’s now picking up the phone nonstop to field commission questions from other brokers.

“It's just more annoying. It just created more calls and more (texts) and more emails for us,” she told CoStar News. “That’s not a new phone call I want to take.”

But some agents said that level of communication is their norm. Agent Kristy DeWitz, for example, said she always reaches out to a listing agent before taking a buyer to view a property.

“Now there's a few extra questions to ask,” DeWitz, who is based in Phoenix, told CoStar News. “Every listing agent is doing it differently.”

The variations in how agents and brokerages are implementing the rules is another challenge that’s come with the adoption of the new system. It’s a problem facing both listing agents and buyer brokers, according to Russell.

“You might have an agent that's been a little disconnected from this that is negotiating a deal with an agent that's been all over this, and then you have people that aren't on the same page,” he said.

Laura Ellis, president of residential sales at brokerage Baird & Warner in Chicago, said her agents have faced similar issues, making for a “bumpy” start.

“Every company seems to approach it a little bit differently. Agents, fortunately, are pretty good at figuring out how to get things done and help people buy and sell houses, but procedurally, it's a little bit challenging,” she told CoStar News.

Russell said that "the biggest unknown is how we should be communicating this because everyone's afraid to do the wrong thing.”

In addition to the extra lift of communicating compensation, buyer brokers must also have a signed agreement with clients before they can take them on a property tour, either in-person or virtually.

That agreement must contain a disclosure of the broker's compensation, making that fee explicit either as a rate or a number, but not as an open-ended figure. It must also include a term explaining that the broker is not allowed to receive compensation exceeding the amount outlined in the agreement, even if that compensation comes from elsewhere.

The buyer-broker contract adds an extra step to the homebuying process, leading to “more conversation, more questions,” according to Mike Safiedine, a Re/Max broker in San Diego.

“There’s always a give and take with those things,” he said.

On a larger scale, it's a seismic shift for buyer brokers who must now define their worth to clients to secure compensation. Though compensation has always been negotiable, and sellers have never been required to pay a buyer agent, the new rules have relieved some of the expectations that previously existed.

“You really have to be dialed in with what your services are and what value you're providing to the client,” DeWitz said. “On the buy side, when you're representing a buyer client, the buyer has never had to take into consideration that they might have to pay their agent. And so if they're going to have to come out of pocket, potentially, to pay an agent, now you have to bring your value proposition.”

The agreement isn’t just a disruption for agents: Buyers have shown apprehension when they learn they must sign an agreement before touring a house.

“It just sounds very foreign to them that they'd have to sit down with somebody and sign something,” Ellis said.

In one example, a prospective buyer was referred to Baird & Warner by a friend and called the brokerage to ask about touring a home, according to Ellis. But when the agent brought up the buyer’s broker agreement, the client “objected right away.”

“After a more thorough conversation and a conversation with our loan officer who confirmed what the agent was saying, the client said, ‘OK, I get it. I'm comfortable now; I'll sign it,’” she said.

Even so, some brokers anticipate the industry will be better off, for the benefit of both agents and consumers, under the newly introduced rules.

For buyer agents, the new rules establish transparency immediately, a shift that establishes a relationship “on a basis of professionalism instead of by default,” according to Safiedine.

“In the past, a lot of buyer agents were working with several buyers without contracts,” he said. “They were prone to get burnt by a buyer just going directly to the listing agent, or finding one at the open house, and just really doing what's in their best interest.”

DeWitz said she’s excited for the market to get more competitive from a buyer standpoint, giving agents greater opportunity to advocate for their value and work with more clients.

“The buyers really want to make sure it's not their friend who sells one house a year, or a relative that's never sold a house. Now they're wanting to know, OK, if I'm going to have to pay you potentially, what value are you bringing to me?” she said.

Ultimately, while the adjustments might be off to a rocky start, committed agents will prevail, and consumers will have more say in the process of buying or selling a house, according to Michael Biryla, a broker with the Agency in New York.

“Good agents that establish value, that know their worth and provide value, are always going to be compensated,” Biryla told CoStar News. “I'm sure we're going to see 15 different templates of these buyer agreements over the next six weeks. I guarantee you, once the dust settles, I think it's going to go back to normal. I just think right now we just have to kind of go through the growing pains of a new norm.”