Are you buying or selling a home? Then you might be wondering: “Who pays the real estate agent?” Traditionally, this cost has been shouldered by the seller, but recent changes have brought new dynamics into play.
The National Association of Realtors (NAR) and Multiple Listing Service (MLS) have implemented new rules about how real estate agents communicate about real estate fees. These changes went into effect on August 17th, 2024, and are intended to provide greater transparency and competition around fees.
In this Redfin article, you’ll learn everything you need to know about who pays the real estate agent, agent commissions, and the recent changes affecting them.
What is a real estate commission?
A real estate commission is a payment the homebuyer or seller makes to their agent(s) for their services in helping them purchase or sell a home. The commission is often a percentage of the final home sale price and is exchanged during the final transaction at closing.
Who pays the real estate agent?
Sellers have historically paid both the buyer and seller’s agent fees from the proceeds of the sale. But as of August 17, 2024, buyers will now agree to their agent’s fee in writing before touring. Buyers can still ask the seller to cover the buyer’s agent fee when they make an offer.
Because of this change, the amount the seller has to pay a buyer’s agent varies from buyer to buyer. Redfin expects that sellers will continue to cover the buyer’s agent commission fee in many transactions, but increasingly, these fees will be negotiated as part of the offer.
Here are two options for how a seller might navigate the new commission process:
- The seller can leave it open-ended and ask buyers to make their best offers, which may include buyer agent compensation, and then negotiate from there.
- Sellers can proactively offer a commission or a concession that the buyer could use to pay their agent as part of their home’s marketing strategy….