Do Sellers Pay the Buyer’s Agent Commission?
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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.
You may have seen headlines announcing that a landmark court settlement has changed the way Realtor fees are paid. If you’re planning a home sale, your first question might be, “Do sellers pay the buyer’s agent commission?”
For decades, sellers have traditionally been responsible for paying both their listing agent’s commission and the buyer’s agent commission. Now, these fees have been decoupled — buyers are expected to pay their own agent’s commission.
In this easy-scan post, we’ll explain what these changes mean for sellers, the pros and cons of covering a buyer’s agent commission, and strategies for navigating this evolving market.
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Do sellers pay the buyer’s agent commission?
The short answer is: it depends. A recent court settlement by the National Association of Realtors (NAR) has shifted this expectation to buyers, but sellers can still choose to pay the buyer’s agent commission as part of the negotiation process. In many markets, this remains a common practice to attract buyers, especially those who might struggle to cover their agent’s fees upfront.
If the seller decides to pay, this commission is typically deducted from the proceeds of the sale at closing. However, under the new structure, it is not an automatic requirement. Sellers now have the flexibility to decide whether offering this incentive aligns with their goals and the market conditions.
What is a buyer’s agent commission?
A buyer’s agent commission is the fee paid to the real estate agent representing the buyer in a home sale. This commission is typically calculated as a percentage of the home’s final sale price, often ranging between 2.5% and 3%.
For instance, if a home sells for $425,000:
- A 3% commission would amount to $12,750.
- A 2.5% commission would total $10,625.
Later in this post, we’ll provide a table with more examples of buyer’s agent commission costs based on varying home prices and percentages.
How did commissions work in the past?
Traditionally, sellers paid both the listing agent’s fee and the buyer’s agent’s commission as part of the overall transaction costs. This longtime model was designed to make it easier for buyers to afford professional representation without incurring significant out-of-pocket expenses.
For example, on a $425,000 home with a 6% total combined commission, the seller would need to pay $25,500. At closing, the commissions would be split up, generally like this:
- $12,750 would go to the listing agent.
- $12,750 would go to the buyer’s agent.
Following the split, both agents would typically share a portion of their earnings with their respective brokerages. This default equation is no longer the expected standard.
What changed with the NAR settlement?
Following a series of lawsuits, a federal court determined that the NAR’s long-established agent commission structure and policies infringed on antitrust laws. The court found that NAR mandates pressured home sellers into paying a fee that could be paid by the buyer.
The NAR settlement changed the rules and shifted the responsibility for paying the buyer’s agent commission to buyers. Sellers are no longer automatically expected to cover this fee. This adjustment provides sellers with greater flexibility in managing their costs but also creates new considerations when pricing and marketing their homes.
Sellers may still choose to pay the buyer’s agent commission in certain scenarios, especially as a strategic tool to attract more buyers.
Should sellers offer to pay the buyer’s agent commission?
While the default expectation has shifted, there are situations where covering the buyer’s agent commission can be advantageous for sellers:
- In competitive markets: Offering to pay the buyer’s agent commission can make your property stand out, especially if other sellers aren’t doing so.
- To expand your buyer pool: By covering this cost, you can increase your home’s appeal to a broader audience of potential buyers. For example, many first-time buyers may struggle to pay their agent’s fee upfront.
- To secure a higher sale price: With more buyers, you’re more likely to receive multiple offers and possibly start a bidding war.
- To get a faster sale: Paying the buyer’s agent commission can remove a potential obstacle, leading to faster offers and a quicker closing process.
Examples of buyer’s agent commission costs
If you decide to cover the buyer’s agent commission, the cost will depend on your home’s sale price and the negotiated Realtor fee percentage. Below is a table illustrating potential fees:
| Sold price | 2% commission | 2.5% commission | 3% commission |
| $100,000 | $2,000 | $2,500 | $3,000 |
| $150,000 | $3,000 | $3,750 | $4,500 |
| $200,000 | $4,000 | $5,000 | $6,000 |
| $250,000 | $5,000 | $6,250 | $7,500 |
| $300,000 | $6,000 | $7,500 | $9,000 |
| $350,000 | $7,000 | $8,750 | $10,500 |
| $400,000 | $8,000 | $10,000 | $12,000 |
| $450,000 | $9,000 | $11,250 | $13,500 |
| $500,000 | $10,000 | $12,500 | $15,000 |
| $550,000 | $11,000 | $13,750 | $16,500 |
| $600,000 | $12,000 | $15,000 | $18,000 |
| $650,000 | $13,000 | $16,250 | $19,500 |
| $700,000 | $14,000 | $17,500 | $21,000 |
| $750,000 | $15,000 | $18,750 | $22,500 |
| $800,000 | $16,000 | $20,000 | $24,000 |
| $850,000 | $17,000 | $21,250 | $25,500 |
| $900,000 | $18,000 | $22,500 | $27,000 |
| $950,000 | $19,000 | $23,750 | $28,500 |
| $1,000,000 | $20,000 | $25,000 | $30,000 |
| $1,500,000 | $30,000 | $37,500 | $45,000 |
The most common buyer’s agent commission: In a recent survey of more than 750 top real estate agents in the U.S., HomeLight found that:
- 24% said buyers are paying a 3% agent commission
- 34% said buyers are paying a 2.5% agent commission
- 10% said buyers are paying a 2% agent commission
What happens if sellers don’t pay the buyer’s agent commission?
If a seller chooses not to pay the buyer’s agent commission, buyers will need to cover this cost themselves. This could limit your pool of potential buyers, especially among those who are already stretching their budgets to purchase a home.
In some cases, buyers may request other seller concessions to help offset expenses. Examples of concessions include:
- Covering closing costs, such as origination fees or appraisal fees.
- Paying for discount points to lower the buyer’s mortgage rate.
- Offering to cover a portion of the buyer’s title insurance or property taxes.
Your real estate agent can help you determine whether these concessions make sense in your market or selling situation. For the best results, find a top-performing Realtor with negotiation skills and a high sale-to-list ratio — a metric that measures a property’s final sale price against its listing price.
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Tips for handling buyer’s agent commission negotiations
To effectively navigate commission negotiations, consider the following tips:
- Negotiate strategically: Work with your listing agent to determine a fair and competitive commission structure that suits your goals.
- Stay informed about market trends: Understand how other sellers in your area are addressing buyer’s agent fees.
- Offer incentives selectively: Use concessions or commission payments as tools to differentiate your property when it matters most.
Takeaways: Do sellers pay the buyer’s agent commission?
The NAR settlement has fundamentally changed how buyer’s agent commissions are handled, giving sellers more control over their transaction costs. Here’s what to remember:
- Sellers are generally only responsible for their listing agent’s commission.
- Covering the buyer’s agent commission can be a strategic move in certain market conditions.
- Working with an experienced agent can help you make informed decisions about commission structures and concessions.
If you’re preparing to sell your home, HomeLight can connect you with top-rated listing agents who understand the nuances of your local housing market. Our free Agent Match tool uses data from millions of transactions and thousands of reviews to identify the best agents for your needs. Answer a few simple questions to get started today.
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- "How the NAR Settlement Is Changing Homebuying and Selling," U.S. News, Aly J. Yale (August 2024)
- "The 100-years-war over real estate commissions," Housing Wire, Matthew Blake (April 2021)
- "Real Estate Commission Structure Found to Violate Antitrust Law," JD Supra, Miller Nash, LeAnne Bremer & Beatrice Bremer Lucas (November 2023)
- "A Guide to Seller-Paid Mortgage Rate Buydowns," U.S. News, Erika Giovanetti (May 2024)
At HomeLight, our vision is a world where every real estate transaction is simple, certain, and satisfying. Therefore, we promote strict editorial integrity in each of our posts.