Addressing the Buyer Agent's Fee

Traditionally in the U.S. housing market, the seller has offered the buyer's broker and agent a share in the commission specified in the listing agreement between the seller and the listing broker and agent.  In a settlement between the National Association of REALTORS�, beginning on August 17, 2024, buyers will have to sign an agreement with their buyer's agent specifying what services will be available and the fee the buyer's agent is charging.

Many sellers may continue to offer compensation to the buyer's broker and agent, maintaining the traditional practice of the seller paying both sides of the commission. However, when no offer of compensation is made, there are several distinct alternative ways to facilitate the buyer agent's fee, as well as a myriad of variations to suit different scenarios.

In an instance where the seller doesn't offer compensation to buyer agents regarding a property you're interested in, there are several options to consider:

1. Negotiation with the Seller
   As your agent I can negotiate with the seller or their agent, on your behalf, to include the buyer agent's commission in the terms of the sale. This becomes part of the overall negotiation strategy when making an offer.
2. Adjusting the Purchase Offer
   As your agent, I can modify the offer to indirectly cover the commission by raising the purchase price to include the commission and have it included in the financing. For example, if a home is listed at $400,000, and the commission is $12,000, the offer would be for $412,000 with a condition that the seller pays a $12,000 commission to the buyer's agent.
   
   This approach ensures the seller receives their expected amount while covering the commission.
3. Seller Concessions
   As your agent, I can negotiate for seller concessions, where the seller agrees to pay a portion of the closing costs. This can include loan origination fees, appraisal fees, points, and other items that are disclosed in the offer to purchase.
   Seller concessions can help offset your out-of-pocket expenses, potentially making the purchase more affordable even with commission obligations.
4. Buyer Pays Commission Directly
   If the seller refuses to pay the buyer's agent commission and it can't be incorporated into the purchase price, it may be necessary to pay the commission directly. This would be discussed and agreed on before proceeding with any offer, and it would be clearly stated in the buyer's agency agreement.

It's important to note that any combination of these strategies may be used to find the best solution for your specific situation. The overall goal is to ensure you can pursue properties you're interested in while fairly addressing the commission aspect.

Download our Buyer's Agent Guide for more information.