Do Home Sellers Pay the Buyer’s Agent Fee?
New rules apply to the buyer's agent fee in a home sale. As a seller, are you expected to pay the commission for the Buyer’s Realtor? See your options.
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.