Do Home Sellers Pay the Buyer’s Agent Fee?
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Richard Haddad Executive EditorClose
Richard Haddad Executive EditorRichard Haddad is the executive editor of HomeLight.com. He works with an experienced content team that oversees the company’s blog featuring in-depth articles about the home buying and selling process, homeownership news, home care and design tips, and related real estate trends. Previously, he served as an editor and content producer for World Company, Gannett, and Western News & Info, where he also served as news director and director of internet operations.
For nearly 100 years, the real estate agent commission structure remained mostly unchanged. Over several generations, sellers have been expected to pay both their listing agent commissions and the buyer’s agent fee.
But now the industry is experiencing a seismic shift brought on by a landmark court settlement by the National Association of Realtors (NAR). Buyers are now responsible for paying their own Realtor commissions.
In this post, we break down what has changed, how these changes might affect your home sale, and whether sellers should still consider covering the buyer’s agent fee.
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What is the buyer’s agent fee?
The buyer’s agent fee is the commission paid to the agent representing the buyer in a transaction. This fee is typically calculated as a percentage of the home’s sale price, with most commissions falling between 2.5% and 3%.
For example, on a home sold for $430,000:
- A 3% buyer’s agent fee would amount to $12,900.
- A 2.5% fee would total $10,750.
Later in this post, we’ll provide a table showing more buyer’s agent fee examples by home price and percentage.
How were buyer’s agent fees traditionally handled?
Traditionally, sellers paid both their listing agent’s fee and the buyer’s agent’s fee as part of the overall commission. This arrangement made it easier for buyers to afford professional representation without needing to pay out of pocket.
For instance, here is an example under the traditional agent fee model:
- On a $430,000 home, a 6% total commission would amount to $25,800.
- This fee was split equally, with $12,900 going to the listing agent and $12,900 to the buyer’s agent. Each agent would also typically need to give their brokerage a portion of their fee.
What has changed with the NAR settlement?
The recent National Association of Realtors (NAR) court settlement introduced significant changes to commission structures. Buyers are now generally expected to pay their own agent’s fees, which removes the automatic financial burden on sellers. Sellers are typically responsible only for their listing agent’s commission, which averages 2.5%-3% of the home’s sale price.
However, in some cases, sellers may choose to offer to cover the buyer’s agent fee as a negotiating tool.
Should sellers still consider offering to pay the buyer’s agent fee?
While the expectation has shifted, there are scenarios where it may be advantageous for sellers to cover the buyer’s agent fee:
- In slower markets: In a buyer’s market — where sellers have more competition — offering to pay the buyer’s agent commission can make your property more attractive.
- To increase your buyer pool: You can attract more potential buyers who might not otherwise consider a property if they have to pay their agent out of pocket. For example, many first-time buyers may not have the budget to pay their agent’s fee upfront.
- Higher selling price: Providing this seller concession may help start a bidding war. In addition, buyers might be willing to offer a higher price (which is typically financed) if they don’t need to factor in the upfront cost of their agent’s commission.
- If you need a faster sale: Removing the financial burden of the buyer’s agent fee can lead to a quicker home sale by attracting more qualified buyers.
- Giving your home a competitive advantage: When multiple properties are on the market in your neighborhood, offering to pay the buyer’s agent commission can give your property an edge.
What’s the most common buyer’s agent fee? In a recent survey of more than 750 top real estate agents nationwide, HomeLight found that:
- 24% said buyers are paying a 3% commission
- 34% said buyers are paying a 2.5% commission
- 10% said buyers are paying a 2% commission
How much will the buyer’s agent fee cost?
If you agree to pay the buyer’s agent commission, the amount you pay above your own listing agent fees depends on the percentage you negotiate and the total selling price of the home. The table below illustrates what you can expect to pay in buyer agent fees broken out by home price and percentage:
| Selling price | 3% fee | 2.5% fee | 2% fee |
| $100,000 | $3,000 | $2,500 | $2,000 |
| $150,000 | $4,500 | $3,750 | $3,000 |
| $200,000 | $6,000 | $5,000 | $4,000 |
| $250,000 | $7,500 | $6,250 | $5,000 |
| $300,000 | $9,000 | $7,500 | $6,000 |
| $350,000 | $10,500 | $8,750 | $7,000 |
| $400,000 | $12,000 | $10,000 | $8,000 |
| $450,000 | $13,500 | $11,250 | $9,000 |
| $500,000 | $15,000 | $12,500 | $10,000 |
| $550,000 | $16,500 | $13,750 | $11,000 |
| $600,000 | $18,000 | $15,000 | $12,000 |
| $650,000 | $19,500 | $16,250 | $13,000 |
| $700,000 | $21,000 | $17,500 | $14,000 |
| $750,000 | $22,500 | $18,750 | $15,000 |
| $800,000 | $24,000 | $20,000 | $16,000 |
| $850,000 | $25,500 | $21,250 | $17,000 |
| $900,000 | $27,000 | $22,500 | $18,000 |
| $950,000 | $28,500 | $23,750 | $19,000 |
| $1,000,000 | $30,000 | $25,000 | $20,000 |
| $1,500,000 | $45,000 | $37,500 | $30,000 |
What happens if sellers choose not to pay the buyer’s agent fee?
If a seller opts not to pay the buyer’s agent fee, buyers will need to cover this cost themselves. This could lead to fewer offers, particularly from buyers who are already stretching their budgets to afford a home.
In some cases, buyers may request concessions from the seller to help offset these costs. Some examples of other costs you can offer to cover for the buyer include:
- Origination fees
- Discount points (to lower the buyer’s interest rate)
- The buyer’s first mortgage payment
- Attorney fees
- Recording fees
- Appraisal fee
- Inspection fees
- Title insurance
- Property taxes
Your listing agent can help you decide if offering to pay any of these buyer closing costs is a good selling strategy in your local market. Be sure to work with a top agent who has a proven sale-to-list ratio and experience in negotiations.
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Tips for navigating buyer’s agent fee negotiations
As a seller, here are a few strategies to navigate buyer’s agent fee discussions:
- Negotiate with your listing agent: Determine a competitive commission rate that aligns with your market conditions.
- Offer concessions selectively: Consider covering part or all of the buyer’s agent fee in situations where it could increase your home’s appeal.
- Stay informed about local trends: Work with your agent to understand how similar homes in your area are handling buyer’s agent fees.
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Key takeaways for sellers: Buyer’s agent fee
The NAR settlement has shifted the responsibility for buyer’s agent fees from sellers to buyers, providing more flexibility for sellers. Here’s what to remember:
- Sellers are generally only responsible for their listing agent’s commission, averaging 2.5%-3% of the sale price.
- Buyers are now expected to pay their agent’s fee, but sellers can still choose to cover this cost as a negotiating tool.
- Market conditions and buyer demographics will play a significant role in determining whether offering to pay the buyer’s agent fee is advantageous.
By staying informed and working closely with a knowledgeable agent, sellers can make strategic decisions about commission structures that align with their goals and market dynamics.
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