Who Pays Buyer’s Agent Fees?

Most buyers and sellers work with licensed Realtors when entering the real estate market. According to the National Association of Realtors (NAR), 89% of buyers used an agent or broker during the purchase process in 2024. Real estate agents guide buyers through each purchase step, from securing pre-approval from lenders to attending the closing appointment. 

However, one of the most common questions buyers have is who pays the real estate agent fees at the end of the transaction. This answer has become even more common in the wake of the recent NAR settlement, which was designed to make commission negotiations more transparent.    

This guide will cover everything you need to know about who pays buyer’s agent fees and how much you can expect the fees to be. Use this guide to feel confident when hiring a Realtor and entering the market for the first time.

What Are Buyer’s Agent Fees?

Before you can explore who pays real estate fees, it helps to know how your Realtor gets paid. Most agents work on commission-based contracts. They will receive a percent of the home sale profits after the deal closes.

Because of this, agent pay varies widely from one transaction to the next. They will receive a smaller paycheck from a buyer who wants a small condo compared to a buyer searching for a mansion. 

The number of hours a Realtor works before they get paid also varies from one client to the next. A buyer could look at three houses, fall in love with one, and have a seamless purchase process in a few weeks. Another buyer could spend months looking at dozens of homes before they’re even ready to place a bid. 

The services your Realtor provides should not change depending on your needs as a buyer. Even if it takes a little longer for you to find your ideal home, your agent should be committed to setting up showing appointments, helping you with inspections, and reviewing appraisal reports.

Examples of Buyer’s Agent Commission Fees

Before the NAR settlement, it was standard for the buyer’s agent to receive a 3% commission for their services. This was usually paid by the seller. Here are a few examples highlighting how commissions and profitability can vary from one buyer to the next. 

• Client A buys a house for $500,000 and the Realtor receives $15,000 in commissions after the closing appointment. 
• Client B buys a house for $200,000 and the Realtor receives $6,000 in commissions after the closing appointment. 
• Client A wants to buy a specific house in a desirable neighborhood. They place a bid, go under contract, and close in less than a month. This means the Realtor gets paid $15,000 for a month’s of work. 
• Client B is new to the area and takes their time looking at homes and exploring different neighborhoods. The buyer’s agent works with them for three months before the closing appointment. This brings the $6,000 commission down to $2,000 per month. 

Realtors also juggle multiple clients which can help with this volatility. There may be times when they receive a large check for the month and other times when their profits are smaller. For simplicity, this example also didn’t cover aspects like brokerage fees and marketing costs, which can further eat into the profits of a real estate agent. 

Who Typically Pays the Buyer’s Agent Fees?

In most cases, the seller pays the buyer’s agent fees as part of the overall commission paid to both the listing agent and the buyer’s agent. If the seller’s agent agrees to list the house for a 3% commission and the buyer’s agent is set to accept a 3% commission, then the seller will pay a 6% commission rate total. In the example above, the seller of the $500,000 house would pay $30,000 in commission fees using the 6% rate. 

This structure benefits buyers by allowing them to work with a professional agent without having to cover their fees out-of-pocket. Many buyers spend several months (if not years) saving for a down payment so they can afford a home. If they had to pay their agents a commission on top of it, many people would be pushed out of the real estate market entirely. 

For example, the average down payment in Q1 2024 was 8% of the home’s value. This comes out to about $26,700 according to Bankrate. If the median home price is $333,750 at the time, then a 3% commission fee would be around $10,000. Saving that extra money could lower the down payment that buyers have to work with or cause them to push back buying for another year while they save. 

It makes more sense for a homeowner to budget Realtor fees into their sales estimate. They don’t have to save any money as the agent commissions are pulled from the profits of the sale. This process also incentivizes sellers’ agents to get the highest sales price for their clients. The more a house sells for, the more everyone gets paid.

How Do Sellers Afford Real Estate Agent Fees? 

Homeowners who want to sell their properties need to crunch some numbers before they list. This will confirm that they can afford to list their house and cover all moving costs. In most cases, the real estate agent’s commission is a portion of the final sale price, not the profits from the sale.

This means sellers need to confirm they will turn enough of a profit when listing to cover agent commissions. 

Here are a few examples illustrating the importance of checking the math before listing your house: 

• Homeowner A sells their house for $500,000 and does not have a mortgage. They pay $30,000 in Realtor fees and receive $470,000 for the sale. 
• Homeowner B sells their house for $400,000 and has a $360,000 mortgage. They pay $24,000 in commission and receive $16,000 for the sale.

The second homeowner may lose money on the home sale once they pay their moving costs and any seller concessions. Their sale profits could also be less than their initial down payment depending on the market they bought in. By negotiating commission rates or potentially working with flat fee Realtors, some sellers can save money and break even on the deal.

Knowing what to expect from the recommended listing price and agent commissions can help sellers confirm that they aren’t losing money during the home sale process.

Is It Possible to Negotiate Agent Fees?

Everything is a negotiation in real estate, including commissions. Both the buyer and the seller can negotiate fees with their Realtors before entering into agreements with them. 

When selling a property, a homeowner might ask their Realtor to list their home for a 5% commission rate. The seller’s agent might split the fees at 2.5% for themselves and the buyer’s agent, or take a 2% commission fee and give 3% to the buyer’s agent. The homeowner and seller’s agent will typically discuss the fee split when they go over commission rates. Once an agreement has been reached, they will sign a listing agreement. 

Even a 1% drop in commission rates can have a big difference on the cost homeowners accrue when selling a property. Instead of paying $30,000 on a $500,000 home, a seller would only have to pay $25,000. That $5,000 in savings could be used to cover moving costs.  

Buyers can also ask their agents to accept lower commission fees, but this is less common. A buyer might ask the agent to concede a portion of their fees to make their offer more appealing to sellers. For example, if a seller plans to give a 2.5% commission to the buyer’s agent but only needs to give 2%, they can save $2,500. 

While buyers and sellers can negotiate real estate fees, agents can walk away or counter if they aren’t treated fairly. In some markets, a Realtor doesn’t have to work for a lower rate. They can find other clients who are willing to pay them 3%. Know that if you try to lowball your real estate agent, they might walk away. Negotiate fairly and respect the time your agent puts into the sale.

Does the Buyer’s Agent Get Paid If the Deal Falls Through?

In most cases, the buyer’s agent does not get paid if a deal falls through. They only get paid after the buyer closes on a house. Depending on what caused the deal to break, the buyer can either choose to work with a new agent or stay with their current one and start the process over again. For example, if the seller pulls out unexpectedly, the buyer and their real estate agent will start touring homes again.  

The agent likely also won’t get paid if the agreement ends before the buyer finds a home. For example, if two parties work together for six months and the buyer hasn’t had an offer accepted, they might walk away from the Realtor and hire another. The real estate agent wouldn’t get paid for their time and efforts. 

However, some agents may have clauses in their contracts stipulating that the buyer or seller pays for specific services even if the sale doesn’t happen. This could be a flat fee for their time or a breakdown of specific expenses that the Realtor would like covered. For example, a seller’s agent could ask the homeowner to cover the cost of professional photos if they decide against selling the house and pull it from the market. Photos can be an expensive part of working in real estate. 

If you are worried about paying extra fees as a buyer, read the buyer’s agreement carefully. Go over each clause that your real estate agent adds to their agreement and understand the costs that come with working with them. This way you won’t be surprised by unexpected fees because of a failed real estate transaction. 

How Does the NAR Settlement Change Fee Structures?

There have been a lot of discussions about the 2024 NAR Settlement and how it will change real estate transactions. Some claim that buyers will have to start paying agent commissions, but this is false. The main goal of the suit is to increase transparency in each real estate transaction. Here are a few key highlights from the NAR lawsuit that impact buyers: 

• Real estate agents are encouraged to sign agreements with buyers before showing them homes. These agreements clarify the expectations of both parties working together and require buyers to actively agree to any flat fee costs or charges if a deal doesn’t go through. 
• Listing agents cannot put offers of compensation in the multiple listing service (MLS). This prevents real estate agents who represent buyers from steering them toward homes where they would get paid more.  
• An agent’s commission is negotiable. Buyers do not have to immediately agree to an agent’s rate and can counter with their own commission offer. That said, a Realtor does not have to accept this counteroffer if it is deemed unfair.

Buyers and sellers should not feel forced to accept specific terms. They also shouldn’t be misled during the home sale process so the buyer’s agent or listing broker gets paid more. 

Know the Commission Expectations of Your Real Estate Agent

Real estate agents fees are typically covered by the seller and it is unlikely that will change. While both buyers and sellers have increased transparency because of the NAR settlement, it makes sense that the seller covers the commission costs in most deals. This is good news for buyers who don’t have to save up to afford their agent’s commission. Sellers also don’t have to worry about saving to list their house because the fees are built into the overall home sale. 

If you are ready to buy a house, take time to interview Realtors and find a real estate agent you can trust. There are plenty of buyer’s agents out there, so it’s only a matter of finding a good personality fit for your needs. 

To find qualified Realtors in your area, turn to FastExpert. We have a large database of real estate professionals who have detailed profiles on their experience and the types of buyers they work with. You can read these profiles and contact a few agents you want to talk to. Try FastExpert today and start the home-buying journey.