Let’s clear up a big question: Who pays the real estate agent? For many years, sellers usually took care of the commission for both the listing agent (the person who helps sell the house) and the buyer’s agent (the person who helps buy the house). But since 2024, a huge industry settlement changed things. Now, buyers and sellers each might pay their own agent. This article explains how it all works, what’s new, and what it means for you.
What Was the Old Way?
Traditionally, when a house was sold, the seller paid a commission—usually 5–6% of the sale price. That fee was split between:
- The listing agent
- The buyer’s agent
In this setup, buyers didn’t directly pay their agent—everything was handled by the seller.
What Changed in 2024? A Big Shift
In August 2024, new rules went live after a court settlement with the National Association of Realtors (NAR). These rules changed agent commissions:
- Buyers now often pay their own agent
- Sellers still pay their listing agent
- Buyers and sellers must agree on fees in advance
This “decoupling” means you may face new choices—and new costs.
How It Works Today
Sellers:
- Continue paying their listing agent
- Can choose to also pay the buyer’s agent—but it’s now negotiable
Buyers:
- Often pay their agent directly (percentage, flat fee, or hourly)
- Must sign an agreement outlining payment before starting home tours
Why the Change?
- The settlement aimed to increase transparency and give buyers more power to negotiate fees
- Some workarounds allow agents to keep commission models similar to before
Quick Comparison
Before 2024
- Seller paid both agents
- Fee around 5–6% of the sale price
After August 2024
- Seller pays their own agent
- Buyer pays their own agent (unless seller agrees to help)
- Fees are negotiable and must be disclosed upfront
Example of How Commission Splits Used to Work
Suppose a home sold for $400,000 with a 6% total commission:
- $24,000 total
- $12,000 to listing agent
- $12,000 to buyer’s agent
Now, with decoupled fees:
- Seller pays about 3% to their agent
- Buyer might pay 2%–3% to their agent—negotiable
What You Should Know
For Buyers:
- Be ready to negotiate and sign a fee agreement early
- Ask if the seller will cover or share the cost
- Look into discount agents, flat fees, or rebates
For Sellers:
- You’re not forced to pay the buyer’s agent anymore
- Offering to help cover that cost can make your home more attractive
- Make sure your listing agent discloses any offers for a buyer’s agent
Extra Tips & Jeanie’s Story
Quick tip: Know your local norms—commissions vary. For example, in New York, average combined commission is 5.36%, split about equally.
Jeanie’s experience: She paid a buyer’s agent on her own. She felt responsible after losing many offers. But now, she negotiates upfront and is more prepared.
FAQs
Q: Who pays the agent in a new home sale?
A: Often, the builder (seller) covers the buyer’s agent’s fee—but it still must be agreed upfront.
Q: Can buyers still avoid paying agent costs?
A: Sometimes. Sellers might offer concessions that buyers can use towards agent fees or other costs.
Q: Should I use a flat-fee or discount model?
A: Yes! Flat-fee MLS or discount brokerages can help you save thousands—just watch for local rules.
Q: What if agents keep using old trick ways?
A: Some still use private communication to offer commissions, even though MLS rules changed. Know your rights and ask directly.
The world of real estate commissions has changed—and in a good way. Buyers and sellers now have more power to negotiate, leading to better transparency and cost savings. Whether you’re buying or selling, stay informed, ask smart questions, and agree on fees before anything moves forward. That way, you’re set for a smoother deal—and less surprise costs.
