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Trust: Who is really on your side · Home & real estate

How real estate commissions are paid: fair or not?

Real estate commissions are often one of the largest costs in buying or selling a home. For decades, the seller usually paid both agents out of the sale price, so many buyers never thought about it. Rule changes in 2024 brought the question into the open: who should pay a buyer's agent, how much, and was the old system fair?

Is it fair that agent commissions are built into the home price in ways many buyers never see?

Be one of the first to vote.

What happens

Traditionally, a seller signed a listing agreement promising a commission, and part of it was offered to whatever agent brought the buyer. That offer was posted on the local multiple listing service, or MLS. The buyer usually signed nothing about pay, yet the cost was folded into the price of the home.

Under practice changes from a National Association of Realtors settlement, effective August 17, 2024, offers of pay to buyer agents can no longer be posted on the MLS. Agents working with a buyer must sign a written agreement before touring a home. It must state the agent's pay in a clear amount or rate, not open-ended, and say fees are negotiable. Sellers can still offer to cover buyer agent costs off the MLS.

Why many people say it’s not fair

  • Buyers often didn't know their agent's pay depended on the price of the home they bought.
  • A set percentage can feel high for a quick sale and has little link to the hours worked.
  • Agents might steer buyers toward homes offering higher pay to the buyer's agent.
  • Many people didn't know commissions were negotiable and not set by law.
  • Pay tied to price means the agent earns more when the buyer pays more.
  • New written agreements can be confusing, and people may sign them quickly before a showing.

The other side

Agents say a commission pays for far more than a showing: pricing advice, marketing, negotiation, managing inspections and keeping a deal from falling apart. Most are paid only if a sale closes, so they absorb the cost of work on deals that fail. Supporters of seller-paid buyer commissions say it helps buyers who cannot add an agent's fee on top of a down payment and closing costs.

The industry also notes that commissions have always been negotiable, and that the new written agreements make pay clearer to buyers than before.

Options you may not be told about

Negotiate. NAR's own settlement materials say agent fees and commissions are fully negotiable and not set by law, for both buyer and seller agents.
As a buyer, read the written agreement's pay terms. Under the settlement rules the agent cannot receive more than the amount or rate you agreed to, from any source.
Ask the seller to cover your agent's fee or closing costs as part of your offer. Seller concessions and off-MLS offers of pay are still allowed.
Ask whether the buyer agreement can be limited to one home, a short period, or a flat fee instead of a percentage.
Compare full-service, flat-fee and limited-service brokers, or hire a real estate attorney for contract work only.

What you can do

  1. Before your first showing, ask the agent to explain the buyer agreement and how they are paid.
  2. Ask what happens if the seller won't pay your agent, and whether you would owe the difference.
  3. Get pay terms in writing, as a dollar amount or clear rate.
  4. Sellers: ask agents for a written list of services and negotiate the rate before signing.
  5. Compare two or three agents before committing.
  6. Report concerns to your state real estate commission.

Rules and your rights

No federal law sets real estate commissions. The 2024 changes came from a class-action settlement with the National Association of Realtors, which took effect August 17, 2024, and applies to Realtors and Realtor-affiliated MLSs. A federal court gave final approval in November 2024, and in August 2026 the Eighth Circuit Court of Appeals upheld the settlement. State law governs agency agreements and licensing, so your state real estate commission is the place to ask questions or report problems.

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Common questions

Who pays the buyer's agent now?

It depends on the deal. The buyer agrees in writing to the agent's pay. The seller may still offer to cover some or all of it, but that offer can no longer be posted on the MLS. If the seller won't pay, the buyer may owe the agent directly or ask for a seller concession in the offer.

Are real estate commissions negotiable?

Yes. NAR's settlement materials say agent fees and commissions are fully negotiable and not set by law. That applies to both listing and buyer agents. You can ask for a lower rate, a flat fee or fewer services, and compare offers from several agents before you sign anything.

Do I have to sign an agreement before touring a home?

If you are working with an agent who is a Realtor or uses a Realtor-affiliated MLS, yes, a written agreement is required before touring. It must state the agent's pay clearly. You can often keep it narrow, such as one home or a short time. You can also tour open houses or contact a listing agent directly.

Sources: National Association of Realtors: Final reminder of August 17 practice change implementation ↗ · National Association of Realtors: Settlement FAQ (October 2024) ↗ · National Association of Realtors: Appeals court rules Sitzer-Burnett settlement remains intact ↗

General information, not legal, financial or real estate advice. Whether a practice is fair is a matter of opinion; votes and shared experiences are the views of site visitors, not AblePro, Inc. Rules and company policies change; check current terms and your state’s rules.